Partnership Transfer Agreement - Template, Sample Form Pro · UK-law
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AGREEMENT FOR THE TRANSFER OF A PARTNERSHIP BUSINESS AND ASSETS TO A LIMITED LIABILITY PARTNERSHIP
This Agreement is dated ________
PARTIES
(1) The following persons (together the Partners and each a Partner):
________ of:
________
________ of:
________
carrying on business in partnership under the name ________ (the Business Name); and
(2) ________, a limited liability partnership incorporated in England and Wales under the Limited Liability Partnerships Act 2000 with registered number ________, whose registered office is at:
________ (the LLP).
Each of the Partners and the LLP is a party and together they are the parties.
BACKGROUND
(A) The Partners currently carry on the Business as a general partnership governed by the Partnership Act 1890 under the Business Name. The Partners now wish to convert the general partnership into a limited liability partnership and to transfer the Business and the Assets to the LLP as a going concern.
(B) Each of the Partners is, with effect from the Transfer Date, a Member of the LLP and the parties intend that the Business shall be carried on as a going concern through the LLP from the Transfer Date.
(C) The parties intend that the transfer constitutes the transfer of a business as a going concern for the purposes of section 49 of the Value Added Tax Act 1994 and article 5 of the Value Added Tax (Special Provisions) Order 1995 (SI 1995/1268).
AGREED TERMS
1. INTERPRETATION
1.1. In this agreement the following definitions and rules of interpretation apply unless the context otherwise requires.
Definitions
Assets: the Goodwill, the Book Debts, the Cash, the Contracts, the Equipment Leases, the Business Intellectual Property Rights, the Intellectual Property Licences, the Know-How, the Records, the Systems, the Properties and all other assets, properties and rights owned by the Partners and used in connection with the Business at the Transfer Date.
Business: the business carried on by the Partnership under the Business Name, together with all activities directly related to or associated with the operation of that business, including ancillary or incidental activities, described as follows:
________
Business Day: a day other than a Saturday, Sunday or public holiday in England when banks in London are open for business.
Business Intellectual Property Rights: all Intellectual Property Rights owned by, or used by, the Partners in connection with the Business, including those listed in clause 9.
Cash: all cash in hand and cash funds held in relation to the Business at the Transfer Date, including any cheques or securities representing those cash balances as at the Transfer Date, but excluding any that specifically represent Book Debts.
Completion: completion of the transfer of the Business and the Assets in accordance with clause 3.
Consideration: the consideration for the transfer of the Business and the Assets calculated in accordance with clause 2, being £________ (________).
Contracts: the agreements, contracts, licences (including Intellectual Property Licences), equipment leases and commitments entered into by the Partners in relation to the Business (whether oral or written) that remain wholly or partly to be performed at the Transfer Date, except for:
(a) contracts with the Employees; and
(b) the Lease and other agreements relating to the ownership and occupation of the Properties.
Employees: all employees of the Partnership employed to work in the Business at Completion.
Encumbrance: any mortgage, claim, charge, pledge, lien, guarantee, right of set-off, trust, assignment, right of first refusal, right of pre-emption, option, restriction or other encumbrance, or any legal or equitable third party right or interest, or any security interest of any kind or any type of preferential arrangement (or any similar agreement or arrangement creating any of the same or having a similar effect).
Equipment Leases: the leasing, hire purchase, credit sale, deferred purchase and similar agreements (excluding any Lease) entered into by the Partnership in order to acquire equipment or other assets used in the Business.
Goodwill: the goodwill of the Partners in connection with the Business, together with the exclusive right of the LLP or its assignee to represent itself as carrying on the Business in succession to the Partners and to use the Business Name in connection with the Business after Completion.
Intellectual Property Licences: all licences, contracts and other agreements under which:
(a) the Partnership is granted the use of a third party's Intellectual Property Rights in connection with the Business; or
(b) a third party is granted the use of the Business Intellectual Property Rights.
Intellectual Property Rights: copyright and related rights, patents, rights in confidential information, Know-How, trade secrets, trade marks, trade names, design rights, database rights, semiconductor topography rights, utility models, domain names, rights in computer software and all other intellectual property rights of whatever nature, in each case:
(a) whether registered or unregistered;
(b) including any applications for the protection or registration of such rights;
(c) including all renewals and extensions of such rights or applications;
(d) whether vested, contingent or future; and
(e) wherever existing.
Know-How: knowledge and intellectual property connected to the Business, including inventions, discoveries, improvements, processes, formulae, techniques, specifications, methods, tests, reports, component lists, manuals, instructions, drawings and information regarding customers and suppliers.
Lease: the lease and any additional documents governing the holding of the leasehold property, with the following further details:
________
Liabilities: all financial and legal liabilities, whether actual or contingent, owed or to be owed by the Partnership to third parties relating or attributable to or arising from the Business or the Assets at any time before the Transfer Date, including:
(a) all liabilities, claims, actions, proceedings, demands, costs and expenses which arise after the Transfer Date in respect of any goods manufactured or services supplied by the Partners prior to the Transfer Date;
(b) all obligations and liabilities under or in respect of the Contracts;
(c) all obligations and liabilities under or in respect of the Encumbrances;
(d) all payments required to be made to the Employees under their terms and conditions of employment, including wages, salaries, commissions, bonuses, holiday pay and other remuneration or expenses;
(e) all outgoings and expenses of the Business, including rent, rates, service charges and insurance premiums (including any VAT incurred on such outgoings and expenses); and
(f) the Trade Creditors,
but excluding any liability for VAT or for Taxation on profits or chargeable gains arising on transactions or in respect of periods up to the Transfer Date.
Losses: all liabilities, costs, expenses (including reasonable legal expenses), claims, actions, proceedings, damages, fines, penalties and loss of profit.
Member: a member of the LLP.
Partnership: the partnership carried on by the Partners under the Business Name.
Properties: the freehold and leasehold properties used in the Business and listed in clause 8.
Records: all documents (whether in computerised form or otherwise) connected to the Business or the Assets and used in the Business at the Transfer Date, including:
(a) all account books;
(b) payroll records, including all personal data as defined by the UK GDPR (the retained EU law version of Regulation (EU) 2016/679) and the Data Protection Act 2018, and details of national insurance contributions and PAYE records for the Employees;
(c) all books and records required to be kept by the Partnership under paragraph 6 of Schedule 11 to the Value Added Tax Act 1994 relating to the Business and the Assets; and
(d) all lists, data and particulars of clients, customers and suppliers, sales records, price lists, terms and conditions, catalogues, literature and advertising materials.
Systems: all computer systems, products and software, and telecommunications and network equipment, used, owned, leased or licensed by the Partners for the operation of the Business.
Taxation: all forms of taxation, duties, levies, imposts and contributions of any kind, whether of the United Kingdom or elsewhere, together with all interest, penalties, fines and surcharges relating thereto.
Trade Creditors: the amounts owed by the Partnership to its trade creditors in respect of the Business as at the Transfer Date.
Transfer Date: ________.
TUPE: the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246).
VAT: value added tax chargeable under the Value Added Tax Act 1994 and any similar replacement or additional tax.
Rules of interpretation
1.2. A reference to a "clause" is to a clause of this agreement.
1.3. A reference to a party includes that party's personal representatives, successors and permitted assigns.
1.4. A reference to a "person" includes a natural person, corporate or unincorporated body (whether or not having separate legal personality) and that person's representatives, successors and permitted assigns.
1.5. Words in the singular include the plural and vice versa.
1.6. Any words following "include", "includes", "including", "in particular" or any similar expression shall be construed as illustrative only and shall not limit the sense of the words preceding those terms.
1.7. A reference to any books, records or other information includes information recorded or held in hard copy, electronically, magnetically, on film or microfilm or in any other form.
1.8. A reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted from time to time and includes any subordinate legislation made under it.
1.9. An obligation not to do something includes an obligation not to allow that thing to be done.
2. TRANSFER OF BUSINESS AND ASSETS
2.1. The Partners shall transfer the Business and the Assets to the LLP as a going concern with effect from the Transfer Date, with full title guarantee and free from all Encumbrances, on the terms and subject to the conditions of this agreement.
2.2. The Assets to be transferred to the LLP under this agreement shall include the Goodwill, the Book Debts, the Cash, the Contracts, the Equipment Leases, the Business Intellectual Property Rights, the Intellectual Property Licences, the Know-How, the Records, the Systems, the Properties and all other assets, properties and rights owned by the Partners and used in connection with the Business at the Transfer Date.
3. CONSIDERATION
3.1. The consideration for the transfer of the Business and the Assets shall be the net asset value of the Business, being the aggregate book value of the Assets less the aggregate amount of the Liabilities as at Completion.
3.2. The Consideration shall be deemed to be satisfied by the LLP:
3.2.1. assuming the Liabilities in accordance with clause 7; and
3.2.2. ensuring that on Completion:
3.2.2.1. each Partner's interest as a Member of the LLP is identical to that Partner's interest in the Partnership; and
3.2.2.2. the capital contributions credited to each Member in the LLP's accounts are equal to the amounts credited to each corresponding Partner in the Partnership's accounts as at Completion.
3.3. The parties consider that the transfer of the Business and the Assets is the transfer of a going concern and accordingly is treated as neither a supply of goods nor a supply of services for VAT purposes under section 49 of the Value Added Tax Act 1994 and article 5 of the Value Added Tax (Special Provisions) Order 1995. The LLP shall, as soon as reasonably practicable after the Transfer Date, register for VAT and notify HM Revenue & Customs of the transfer.
4. COMPLETION
4.1. Completion of the transfer of the Business and the Assets shall take place on the Transfer Date at ________ or at such other place as the parties may agree.
4.2. On Completion:
4.2.1. the LLP and each Partner shall execute the limited liability partnership agreement governing the relationship between the LLP and each Partner in their capacity as Members;
4.2.2. the Partners shall deliver to the LLP:
4.2.2.1. the original Contracts, together with any necessary deeds of assignment or novation agreements duly executed by the Partners and the relevant third parties;
4.2.2.2. duly executed assignments and transfers of any Assets (excluding the Properties) that cannot be transferred by physical delivery, including the Business Intellectual Property Rights, and all relevant documents vesting title to the Assets in the LLP (including certificates);
4.2.2.3. duly executed transfers, assignments and other documents transferring ownership of the Properties to the LLP, together with all relevant title deeds, planning consents, health and safety files and other documents relating to the Properties;
4.2.2.4. the Records; and
4.2.2.5. all remaining Assets capable of transfer by physical delivery, together with any relevant documents of title in the possession of the Partners;
4.2.3. the Partners shall transfer to the LLP:
4.2.3.1. the Cash; and
4.2.3.2. the remaining funds that the Partnership holds on behalf of any Partner, including any tax reserve, which the LLP shall deposit into bank account(s) opened by the LLP; and
4.2.4. the Partners shall put the LLP into effective control and possession of the Business and the Assets.
5. TITLE, RISK AND INSURANCE
5.1. Title to and beneficial ownership of the Assets shall pass to the LLP as follows:
5.1.1. Assets transferable by delivery, on delivery to the LLP;
5.1.2. the Contracts, on assignment or transfer to the LLP under clause 6;
5.1.3. the Properties, as provided by clause 8; and
5.1.4. any other Asset, on Completion.
5.2. The LLP shall assume risk in the Assets with effect from the date of Completion.
6. THE CONTRACTS
6.1. With effect from Completion, this agreement shall operate as an assignment to the LLP of the benefit of each Contract, except where such assignment would constitute a breach of that Contract.
6.2. With effect from the Transfer Date, or as soon as reasonably practicable after Completion and subject to the consent of any relevant third party, the Partners shall assign, novate or procure the assignment or novation of all the Contracts to the LLP.
6.3. In respect of any Contract not assigned or novated to the LLP at Completion, the Partners shall use all reasonable endeavours to obtain the required third party consent as soon as reasonably practicable after Completion, and, until such consent is obtained:
6.3.1. the Partners shall hold such Contract, and any associated monies, goods and other benefits, as agent and trustee for the LLP, and the LLP shall perform the obligations under the Contract as sub-contractor of the Partners (where permitted) or as agent of the Partners; and
6.3.2. the Partners shall, at the LLP's expense, provide all reasonable assistance to enable the LLP to enforce its rights under the Contract and shall account to the LLP for all monies, goods and other benefits received under it without deduction, set-off or withholding, except as required by law or for VAT purposes.
6.4. Where the third party's consent to the assignment or novation of a Contract is not obtained on terms satisfactory to the LLP within ________ Business Days after Completion, or is refused, the parties shall use all reasonable endeavours to agree an alternative arrangement under which the LLP receives the benefits and assumes the obligations of the relevant Contract.
7. THE LIABILITIES
7.1. With effect from Completion, the LLP shall assume responsibility for the Liabilities and shall duly and diligently perform, pay and discharge all such Liabilities.
7.2. The LLP shall indemnify and keep the Partners indemnified against all Losses suffered or incurred by the Partners arising out of or in connection with any breach by the LLP of clause 7.1.
8. EMPLOYEES
8.1. The parties agree that:
8.1.1. the transfer of the Business and the Assets constitutes a relevant transfer for the purposes of TUPE; and
8.1.2. accordingly, the contracts of employment of the Employees (save in respect of any occupational pension rights excluded by Regulation 10 of TUPE) shall transfer to the LLP with effect from Completion pursuant to Regulation 4 of TUPE.
8.2. The Partners and the LLP shall comply with their respective obligations to inform and consult appropriate representatives under Regulations 13 and 14 of TUPE.
8.3. The LLP shall indemnify and keep the Partners indemnified against all Losses which the Partners may suffer or incur in connection with any claim or demand by, or in respect of, any Employee or any appropriate representative (as defined in Regulation 13(3) of TUPE) arising out of or relating to any act or omission of the LLP on or after Completion.
9. THE PROPERTIES
9.1. The properties of the Partnership to be transferred to the LLP are:
________
9.2. The Partners shall, at the LLP's cost, do all things reasonably necessary to vest the Properties in the LLP, including (where required) registration at HM Land Registry.
10. INTELLECTUAL PROPERTY
10.1. The Business Intellectual Property Rights of the Partnership to be transferred to the LLP are:
________
10.2. The Partners shall execute all such documents and do all such acts as the LLP may reasonably require to vest the Business Intellectual Property Rights in the LLP, including any assignment in a form suitable for recordal at the relevant registries.
11. WARRANTIES
11.1. The Partners warrant to the LLP that they have full right and title to transfer the Business and the Assets free from Encumbrances and that, so far as they are aware, all information disclosed to the LLP in connection with the Business and the Assets is true and accurate in all material respects.
12. VARIATION
12.1. No variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).
13. WAIVER
13.1. No waiver of any right or remedy under this agreement shall be effective unless given in writing, and it shall not be deemed a waiver of any subsequent right or remedy.
13.2. A failure or delay by a party to exercise any right or remedy shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy.
14. FURTHER ASSURANCE
14.1. Each party shall, at its own cost, perform all such further acts and execute and deliver all such further deeds and documents as may reasonably be required to give full effect to this agreement, and shall use reasonable endeavours to procure that any relevant third party does likewise.
15. THIRD-PARTY RIGHTS
15.1. Except as expressly provided, a person who is not a party to this agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of it.
15.2. The rights of the parties to rescind or vary this agreement are not subject to the consent of any other person.
16. ENTIRE AGREEMENT
16.1. This agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.
16.2. Each party agrees that it shall have no remedy in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this agreement.
16.3. Nothing in this clause shall limit or exclude any liability for fraud or fraudulent misrepresentation.
17. NOTICES
17.1. Any notice given under or in connection with this agreement shall be in writing and shall be delivered by hand or sent by pre-paid first-class post to the relevant party at the address specified in this agreement, or to such other address as may be notified in writing.
17.2. Where deemed receipt of a notice would occur outside business hours at the place of receipt, receipt shall be deferred to the resumption of business hours. For the purposes of this clause, business hours means 9.00 am to 5.00 pm Monday to Friday on a day that is not a public holiday in the place of receipt.
17.3. This clause does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other dispute resolution proceedings.
18. GOVERNING LAW
18.1. This agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
19. JURISDICTION
19.1. Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this agreement or its subject matter or formation.
This agreement has been entered into on the date stated at the beginning of it.
Executed as a deed by the Partners:
Signed as a deed by ________ ____________________________
in the presence of:
Witness signature: ____________________________
Witness name: ________
Witness address: ________
Signed as a deed by ________ ____________________________
in the presence of:
Witness signature: ____________________________
Witness name: ________
Witness address: ________
Executed as a deed by the LLP:
Signed as a deed by ________
acting by a designated member ________
Signature: ____________________________
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