Partnership agreements are essential legal documents that outline the terms and conditions of a business partnership. A crucial component of these agreements is the buyout clause, which provides a framework for one partner to buy out the other under specified conditions. This ensures that partnerships can navigate changes without legal complications or disputes. Below are three diverse examples of partnership agreement templates with buyout clauses to illustrate how they can be structured in different contexts.
In a small business setting, partnerships are often formed among friends or family members. This template helps establish clear terms for operating the business and includes a buyout clause for situations where one partner needs to exit the partnership.
Context: This agreement is designed for a local café owned by two partners. They want to ensure that if one partner wishes to leave, the terms for buyout are clearly defined.
Sample Agreement:
**Partnership Agreement**
**Partners:**
- Alex Smith
- Jamie Lee
**Business Name:**
Smith & Lee Café
**Buyout Clause:**
In the event that a partner wishes to exit the partnership, the remaining partner shall have the first right to purchase the exiting partner’s share at a fair market value. This valuation will be determined by an independent appraiser chosen by both partners.
If both partners cannot agree on an appraiser, either partner may petition the local court to appoint a qualified appraiser. The buyout process must be completed within 90 days of notification.
Notes:
Real estate partnerships often require detailed agreements due to the high stakes involved. This template addresses the complexities of property value and investment contributions while including a buyout clause.
Context: This agreement is for a partnership formed to invest in residential properties.
Sample Agreement:
**Partnership Agreement**
**Partners:**
- Taylor Johnson
- Morgan Davis
**Business Name:**
Johnson & Davis Real Estate Investments
**Buyout Clause:**
Should either partner decide to withdraw from the partnership, they must provide written notice to the other partner at least 60 days in advance. The remaining partner will have the option to purchase the withdrawing partner's equity at a price equal to the partner's proportionate share of the partnership's net assets, as determined by the most recent appraisal of the properties held by the partnership.
All appraisals will be conducted by a state-licensed appraiser agreed upon by both partners. Payment for the buyout shall be completed within 120 days after the appraisal is finalized.
Notes:
In the fast-paced world of technology startups, having a clear partnership agreement is crucial to avoid misunderstandings. This template includes a buyout clause that addresses equity stakes and contributions.
Context: This agreement is for a tech startup co-founded by two entrepreneurs.
Sample Agreement:
**Partnership Agreement**
**Partners:**
- Chris Brown
- Pat Taylor
**Business Name:**
Innovate Tech Solutions
**Buyout Clause:**
If either partner wishes to leave the partnership, they must notify the other partner in writing at least 30 days prior to their intended departure. The remaining partner shall have the option to buy out the departing partner's shares at a price based on the current valuation of the company, which will be assessed by an independent financial advisor agreed upon by both partners.
The evaluation process must commence within 14 days of the notification, and the buyout must be completed within 60 days of the valuation being finalized. If the remaining partner declines to purchase the shares, the departing partner may seek to sell their shares to a third party, subject to the remaining partner's right of first refusal.
Notes: