Partnership Buyout Agreement Example: A Guide

A partnership buyout agreement is a legal document that outlines the terms and conditions of the transfer of ownership from one partner to another. The agreement typically includes a description of the assets being transferred, the price to be paid, and the terms of payment. It is an essential agreement for any partnership to have in place to ensure a seamless and fair transfer of ownership.

To help you understand what a partnership buyout agreement looks like, here is an example:

Partnership Buyout Agreement Example

This agreement is made on [Date] by and between [Partner 1] and [Partner 2] of [Partnership Name] (hereinafter referred to as „Partners”).

Whereas, the Partners are in a partnership that has been formed for the purpose of [Describe the purpose of the partnership].

Whereas, Partner 1 wishes to sell their ownership interest in the partnership to Partner 2.

Now, therefore, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. Sale of Partnership Interest

Partner 1 agrees to sell and transfer to Partner 2 [Percentage of Ownership Interest]% of their ownership interest in the partnership.

2. Purchase Price

The purchase price for the [Percentage of Ownership Interest]% ownership interest being sold by Partner 1 to Partner 2 is [Dollar Amount].

3. Payment Terms

The purchase price shall be paid to Partner 1 by Partner 2 as follows: [Insert Payment Terms].

4. Transfer of Assets

Partner 1 shall transfer and assign to Partner 2 all of their rights, title, and interest in the following assets: [List of Assets].

5. Representations and Warranties

Partner 1 represents and warrants that:

a. They have the right to sell and transfer the ownership interest in the partnership, and there are no liens or encumbrances on the ownership interest being sold.

b. The assets being transferred are free and clear of any liens or encumbrances.

6. Dispute Resolution

Any disputes arising out of or related to this agreement shall be resolved by binding arbitration in accordance with the rules of [Arbitration Rules].

7. Governing Law

This agreement shall be governed by and construed in accordance with the laws of the state of [State].

8. Entire Agreement

This agreement contains the entire agreement and understanding between the parties concerning the subject matter hereof and supersedes all prior negotiations and understandings, whether written or oral.

9. Modification

This agreement may not be modified or amended except in writing signed by both parties.

In Witness Whereof, the parties have executed this agreement as of the date first above written.

[Signature Block]

Partner 1: ____________________________

Partner 2: ____________________________

Conclusion

A partnership buyout agreement is a critical document that helps ensure a smooth transfer of ownership between partners. This example agreement provides a basic template that can be customized to suit the specific needs of your partnership. If you are planning to buy out a partner or sell your ownership interest in a partnership, it is important to consult a qualified attorney to ensure that your rights are protected and that the agreement is legally binding.