Sample Partnership Interest Purchase Agreement between Franklin Covey Company, Daytracker.com, et al
What this document covers
The Sample Partnership Interest Purchase Agreement is a legal document used to formalize the sale and purchase of partnership interests among parties involved in a business partnership. This agreement outlines the terms of the transaction, including the rights and responsibilities of each party, the purchase price, and how the ownership of the partnership will be structured after the transaction is complete. It serves as a crucial tool for ensuring all parties are on the same page and helps prevent future disputes, setting it apart from more general partnership agreements.
Key parts of this document
- Identification of the Parties: Lists all involved parties, including their roles and relationships.
- Recitals: Describes the background and purpose of the agreement.
- Sale Terms: Details the partnership interests being sold and the agreed-upon purchase price.
- Representations and Warranties: Each party's assurances regarding their authority and the status of the partnership.
- Closing Conditions: Specifies the requirements that must be met for the transaction to be finalized.
- Indemnification Provisions: Outlines the obligations of parties to defend and compensate each other in case of legal issues that arise after the agreement.
Common use cases
This form should be used when a partner in a business partnership wishes to sell their partnership interest to another party. It is applicable when changes in ownership are needed to facilitate business growth, when restructuring the partnership is necessary, or when one of the partners is exiting the partnership. This agreement is beneficial in clarifying the terms of the transaction and ensuring all parties fulfill their obligations.
Intended users of this form
This form is intended for:
- Business partners looking to sell or buy partnership interests.
- Corporations or individuals engaged in partnership arrangements.
- Attorneys representing clients in partnership transactions.
- Investors seeking to acquire interests in existing partnerships.
Steps to complete this form
- Identify the parties involved in the agreement and their respective roles.
- Include the effective date of the agreement.
- Specify the percentage of partnership interest being sold and the purchase price.
- Detail any representations and warranties made by the parties.
- Review the conditions that must be satisfied before closing the transaction.
- Ensure all parties sign the agreement to formalize their consent.
Does this document require notarization?
This form does not typically require notarization to be legally valid. However, some jurisdictions or document types may still require it. US Legal Forms provides secure online notarization powered by Notarize, available 24/7 for added convenience.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Avoid these common issues
- Failing to clearly define the rights and obligations of each party.
- Not including a thorough description of the partnership interests involved.
- Omitting the effective date or signatures from all parties.
- Ignoring local laws that may impact the validity of the agreement.
Benefits of completing this form online
- Convenience of filling out the form at any time without the need for appointments.
- Editability ensures that parties can customize the agreement for their specific needs.
- Access to legal expertise embedded in the form to help ensure accuracy.
- Ability to securely store and download the completed document for future reference.
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FAQ
Transfer of interest or we can say ownership is possible in case of business as you can transfer your business to any other person with some legal formalities, if applicable. On the other hand, in case of profession, you can not transfer your professional certificate to someone else.
"Partnership interest" means a partner's share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets.
A transfer of partnership interest happens when a business partner relinquishes their ownership rights and responsibilities to another individual or company.
A partner's interest in a partnership is considered personal property that may be assigned to other persons. In addition, an assignment of the partner's interest does not give the assignee any right to participate in the management of the partnership.
The securities laws define security to include an investment contract and general partnership interest could be considered an investment contract.
If a partner's entire interest in a partnership is liquidated or redeemed, he or she recognizes gain to the extent any money or marketable securities received exceeds his or her basis in the partnership interest immediately before the distribution ( Code Sec.
The federal income tax rules for partnership payments to buy out an exiting partner's interest are tricky, but they also open up tax planning opportunities. Payments made by a partnership to liquidate (or buy out) an exiting partner's entire interest are covered by Section 736 of the Internal Revenue Code.
Because the Agreement of Limited Partnership is considered an investment contract, the SEC classifies LP units as securities. If the partnership is sold to the public, then they must be registered under the Securities Act of 1933.
Hence, a general partnership interest is not necessarily or even typically securities unless the Animal Farm1 rule applies, i.e., some general partners have much greater power and/or control of the information so that the other general partners are seen more like relatively passive investors.
A partner can transfer his interest so as to substitute the transferee in his place as the partner, without the consent of all the other partners; a member of company cannot transfer his share to any one he likes.
