Whether the ownership of a partnership can be transferred depends entirely on how the business was initially set up, and how open the other partners are to an ownership change. Partnerships are commonly used business structures because they are quick and inexpensive to set up. One of the initial steps to creating a partnership is developing and signing a partnership agreement among the partners. This agreement states how the business will be run and how profits will be divided. It also states the rules for transferring ownership of the business. In order to sell or buy into a partnership, you must meet all the requirements of the partnership agreement.
Selling a Partnership
Review your partnership agreement for the terms of selling your ownership share of the business. Look for any sales restrictions and conditions that must be met before making a sale.
Discuss the sale with the other partners to get their agreement. A likely condition in your agreement will be that the other partners must approve the sale.
Offer to sell your share of the partnership to the other partners. This might be the quickest and easiest way to transfer your business share. This also may be mandatory in your agreement.
Find a willing buyer for your partnership share.
Introduce your potential buyer to the other partners and get their agreement on the transfer.
Complete any other stated sales conditions in your partnership agreement, and sell your partnership ownership to the buyer.
Buying Into a Partnership
Research several businesses in your area until you find one you want to buy into. You may want to make offers to several businesses, in case your first choice runs into problems.
Speak with the owners of the business and ask if a partner is willing to sell his share.
Review the partnership agreement of the business you want to buy into. Look for the conditions of a sale and any restrictions that might prevent a purchase.
Discuss the sale with the other partners and get their approval of your purchase.
Agree on a purchase price with the selling partner and complete the sale.
- “Fundamentals of Income Taxation”; James Ivers III, et al.; 2010
- Legalcontact.com: Sale of a Partnership Agreement
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