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Agriculture Blog
Opinions and insights from our Agriculture team
We recently ran a seminar in Kent about farming partnerships fit for the 21st century. The seminar was based around a scenario which would be recognisable to many farming families; one of the younger partners stops pulling their weight on the farm, distracted by a love interest elsewhere. In the scenario the partnership agreement does not cover the issue, nor does it make clear provision about how someone can be made to leave the partnership or how they can leave of their own accord. The partners are thrown back on the default provisions of the Partnership Act 1890. This results in considerable distress for those partners who want to continue the farming business but are held to ransom by the absent partner; he threatens to serve a notice dissolving the partnership, with all the potential consequences that bring (sale of the farm, CGT/SDLT becoming payable/an unviable business etc.)
The seminar brought home how vital a well-drawn up partnership agreement is. Below is a list of matters that, as a minimum, a good partnership agreement should cover.
Farm Partnership Basics
Who owns what?
How can the partnership be brought to an end?
What happens when the partnership ends or someone leaves?
What is required of the partners?
How is the partnership to be run?
How are ‘issues’ to be dealt with?
If you have any questions at all about farm partnerships, feel free to get in touch with Julie Robinson, Jarred Wright, Peter Cusick or your usual contact at Roythornes.
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