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Partnership Buy Sell Agreement for Philippines

Partnership Buy Sell Agreement Template for Philippines

A Partnership Buy-Sell Agreement under Philippine law is a crucial legal document that establishes the terms and conditions for the transfer of partnership interests upon specific triggering events. The agreement, governed by the Civil Code of the Philippines and related business legislation, provides a structured framework for managing ownership transitions within a partnership. It includes detailed provisions for valuation methods, payment terms, transfer procedures, and dispute resolution mechanisms, ensuring business continuity while protecting the interests of all partners. The document incorporates specific requirements under Philippine law, including compliance with local corporate regulations and tax considerations.

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What is a Partnership Buy Sell Agreement?

The Partnership Buy-Sell Agreement is an essential document for businesses operating as partnerships in the Philippines, providing a clear framework for handling ownership transitions. This agreement becomes crucial when partners need to exit the business due to retirement, death, disability, or other significant events. It protects both the departing partner's interests and the continuing partners' ability to maintain control over the business. The document must comply with Philippine legal requirements, particularly the Civil Code of the Philippines and the Corporation Code, while addressing local business practices and cultural considerations. It typically includes provisions for valuation methods, payment terms, insurance requirements, and transfer restrictions, ensuring smooth ownership transitions while maintaining business stability. The agreement is particularly important for family businesses, professional partnerships, and medium-sized enterprises where partner relationships and business continuity are critical concerns.

What sections should be included in a Partnership Buy Sell Agreement?

1. Parties: Identification of all partners and the partnership entity, including their complete details and addresses

2. Background: Context of the agreement, description of the partnership business, and purpose of the buy-sell agreement

3. Definitions: Definitions of key terms used throughout the agreement, including triggering events, fair market value, and transfer procedures

4. Triggering Events: Comprehensive list of events that activate the buy-sell provisions, such as death, disability, retirement, or voluntary withdrawal

5. Purchase Price and Valuation: Methods for determining the purchase price of partnership interests, including valuation procedures and timelines

6. Payment Terms: Structure and timing of payments for purchased partnership interests, including any installment arrangements

7. Transfer Procedures: Detailed procedures for executing the transfer of partnership interests, including documentation requirements

8. Rights and Obligations: Ongoing rights and obligations of partners during the transfer process

9. Insurance Provisions: Requirements for life insurance or disability insurance to fund potential buyouts

10. Dispute Resolution: Procedures for resolving disputes related to the agreement, including mediation and arbitration provisions

11. Governing Law: Specification of Philippine law as governing law and relevant jurisdiction

12. General Provisions: Standard clauses including amendments, notices, severability, and entire agreement provisions

What sections are optional to include in a Partnership Buy Sell Agreement?

1. Tag-Along Rights: Optional provisions giving minority partners the right to join in a sale by majority partners

2. Drag-Along Rights: Provisions allowing majority partners to force minority partners to join in a sale

3. Right of First Refusal: Detailed procedures for offering partnership interests to existing partners before external sales

4. Family Transfer Exceptions: Special provisions for transfers to family members or family trusts

5. Competitor Restrictions: Restrictions on transfers to competitors or specific prohibited parties

6. Cross-Purchase vs. Entity Purchase: Alternative structures for implementing the buy-sell provisions

7. Disability Buy-Out Terms: Specific provisions for buying out a disabled partner's interests

8. International Transfer Provisions: Additional requirements for international transfers, if applicable

What schedules should be included in a Partnership Buy Sell Agreement?

1. Schedule A - Current Partnership Interests: List of current partners and their respective ownership percentages

2. Schedule B - Valuation Formula: Detailed methodology for calculating partnership interest values

3. Schedule C - Insurance Policies: List of insurance policies held to fund the agreement, including policy details

4. Schedule D - Approved Appraisers: List of pre-approved business appraisers for valuation purposes

5. Appendix 1 - Transfer Notice Form: Standard form for notifying partners of intended transfers

6. Appendix 2 - Purchase Option Notice: Template for exercising purchase options under the agreement

7. Appendix 3 - Valuation Procedures: Step-by-step procedures for conducting partnership interest valuations

8. Appendix 4 - Required Transfer Documentation: Templates and checklist of required documents for completing transfers

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Sale Agreement

Cost

Free to use
Relevant legal definitions




















































Clauses





































Relevant Industries

Professional Services

Legal Services

Manufacturing

Retail

Construction

Real Estate

Technology

Healthcare

Hospitality

Agriculture

Financial Services

Consulting

Education

Transportation and Logistics

Media and Entertainment

Relevant Teams

Legal

Finance

Compliance

Risk Management

Corporate Governance

Executive Leadership

Business Development

Operations

Administrative Support

Strategy

Relevant Roles

Managing Partner

General Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Business Development Director

Risk Manager

Compliance Officer

Partnership Administrator

Business Owner

Executive Director

Managing Director

Finance Director

Operations Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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