Partnership Transfer Agreement

A Partnership Transfer Agreement is an agreement that sets out the terms on which a general partnership venture will be transferred to a newly formed LLP (limited liability partnership). The Partnership Transfer Agreement will be used by the partners of the general partnership to become members of the LLP (i.e. the partners of the general partnership will also be the same members of the LLP after it is formed).

A General Partnership is a business venture where two or more persons agree to jointly own a business to make profit by sharing responsibilities, assets, financial and legal liabilities, while a Limited Liability Partnership (LLP) is a business venture where two or more persons agree to jointly own a business to make profit however the liability of the partners is limited to the amount of their investment.

For the general partnership to be transferred in its entirety, its assets, contracts, rights and interests all have to be transferred or assigned (as with contracts) to the newly formed LLP. The LLP will also assume the liabilities of the general partnership.

Under a general partnership, the liabilities of the business are also the liabilities of the individual partnership. When the general partnership is transferred to the LLP, the liabilities of the general partnership (which are also the personal liabilities of the partners) will transfer to the LLP. In doing so, the LLP may implement indemnities for the partners' personal liabilities.

The general partnership agreement that governs the general partnership may contain specific provisions that must be followed before a proposed transfer can be legitimate. Similarly, the Limited Liability Partnership agreement may also have provisions that allow the parties to state whether there was a transfer from a general partnership and if there was, what assets have been transferred over to the LLP.

This Partnership Transfer Agreement is to be used where the both the general partnership being transferred and the LLP being created are in the jurisdiction of England and Wales.

Note: This document cannot be used to transfer/convert a general partnership into a limited partnership. This document should only be used where the LLP to which the general partnership will be transferred has already been incorporated and registered at the Companies House.

 

How to use this document

This document will be used by partners to register their interests in the general partnership and transfer them to the newly formed LLP. This agreement will have clauses that address:

• the name and details of the general partnership being transferred;
• the name of the newly formed LLP;
• how much general partnership is being sold to the LLP;
• the date for the completion of the transfer;
• what assets and liabilities will be transferred to the LLP; and
• the transfer date of the general partnership to the LLP.

The Transfer Date is the date on which the general partnership will be transferred/converted into the LLP. The parties can specify a certain date termed the "Transfer Date" when this will take place.

As the partners of the general partnership will also be the members of the LLP, they have the opportunity to choose what they want the agreement to cover and in the case of liabilities, to what extent they will be indemnified by the LLP. Upon the creation of this agreement, all the parties involves should sign and date the agreement and also keep copies of the agreement for their personal records.

Additionally, each partner of the general partnership must have a witness who observes them signing this agreement. Any individual who has no financial or other interest in this agreement can act as the witness to the signing.

 

Applicable law

Companies Act 2006

Limited Liability Partnership Act 2000

 

Help from a lawyer

You can choose to consult a lawyer if you need help.

The lawyer can answer your questions or help you through the process. You will be offered this option when you complete the document.

 

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.