A partnership is a great vehicle to record agreements of people who want to invest together. For example, if you and one or more others buy a property to rent out. But also if you have a share portfolio together with your children, where it is undesirable for a child to simply cash in his share. Thus, a partnership can be well used to teach children how to handle assets.
If you invest together with one or more others, you always run the risk of mutual relations cooling down. That could mean you want to sell your share or someone else wants to. If a fellow investor dies, you may suddenly have to deal with his heirs.
Within a partnership, you can lay down the following things, among others:
- who contributes what and what compensation you get on your contribution;
- what are the powers of each person in the context of ordinary management, but also in the event of sale or purchase;
- does anyone receive additional compensation if they will do more than the others;
- what happens in the event of death, bankruptcy, receivership, etc.;
- for what value can a share in the partnership be transferred;
- must the whole amount be paid at once in the event of a buy-out;
- a restriction on termination of the partnership;
- how to deal with disputes.
A good partnership contract prevents a lot of problems.
For more information on investment partnerships, please contact us. We will be happy to help you.
pkooijman@kooijmanautar.nl
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