60 40 Partnership Agreement for Australia

60 40 Partnership Agreement Template for Australia

This Partnership Agreement is a comprehensive legal document governed by Australian law that establishes and regulates a partnership with a 60/40 ownership split between partners. It sets out the terms and conditions for the partnership's operation, including capital contributions, profit and loss sharing, management rights, decision-making processes, and exit provisions. The agreement complies with the Australian Partnership Act and relevant state legislation, providing a robust framework for managing the unequal ownership structure while protecting both majority and minority partner interests.

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What is a 60 40 Partnership Agreement?

The 60/40 Partnership Agreement is essential for businesses in Australia where partners wish to establish an unequal ownership structure, typically where one partner contributes more capital, expertise, or resources. This document is crucial when forming new partnerships or restructuring existing ones, providing a clear framework for operation under Australian law. It includes comprehensive provisions for capital contributions, profit sharing, management rights, dispute resolution, and exit strategies, all tailored to the 60/40 ownership split. The agreement ensures compliance with the Partnership Act and other relevant Australian legislation, while addressing key aspects such as decision-making thresholds, protection of minority interests, and business continuity planning. It's particularly valuable for businesses seeking to formalize partnerships where one partner takes a leading role while maintaining significant involvement from the minority partner.

What sections should be included in a 60 40 Partnership Agreement?

1. Parties: Identification and details of the partners entering into the agreement

2. Background: Context of the partnership formation and brief description of the business purpose

3. Definitions: Defined terms used throughout the agreement

4. Partnership Structure: Details of the 60/40 ownership split and partnership type

5. Capital Contributions: Initial and ongoing capital contributions from each partner

6. Profit and Loss Distribution: 60/40 profit and loss sharing arrangements and distribution policy

7. Management and Decision Making: Partner roles, voting rights, and decision-making processes

8. Banking and Financial Management: Banking arrangements, accounting procedures, and financial controls

9. Partner Duties and Obligations: Responsibilities, commitments, and expectations of each partner

10. Intellectual Property: Ownership and use of partnership intellectual property

11. Non-Competition and Confidentiality: Restrictions on competing activities and handling of confidential information

12. Term and Termination: Duration of partnership and circumstances for termination

13. Exit Provisions: Process for partner withdrawal, retirement, or death

14. Dispute Resolution: Procedures for resolving disagreements between partners

What sections are optional to include in a 60 40 Partnership Agreement?

1. Good Faith and Fair Dealing: Additional provisions for partner conduct and fair dealing - useful for partnerships with complex relationships

2. Insurance: Requirements for business and liability insurance - important when significant assets or risks are involved

3. Employee Management: Procedures for hiring, managing, and terminating employees - needed if the partnership will have employees

4. International Operations: Provisions for international business activities - required if operating across borders

5. Technology and Data Protection: Digital asset management and data protection provisions - important for technology-focused businesses

6. Environmental Compliance: Environmental obligations and commitments - relevant for businesses with environmental impacts

7. Partner Incapacity: Procedures for managing partner incapacity - important for small partnerships

8. Future Capital Raises: Process for additional capital contributions or external investment - useful for growing businesses

What schedules should be included in a 60 40 Partnership Agreement?

1. Schedule 1 - Capital Contributions: Detailed breakdown of initial and committed capital contributions from each partner

2. Schedule 2 - Business Plan: Initial business plan and strategic objectives

3. Schedule 3 - Partner Contact Details: Current contact and notice details for all partners

4. Schedule 4 - Asset Register: List of partnership assets and their agreed values

5. Schedule 5 - Intellectual Property Register: Details of all IP owned or licensed by the partnership

6. Appendix A - Management Procedures: Detailed operational and management procedures

7. Appendix B - Distribution Policy: Detailed profit distribution and reinvestment policy

8. Appendix C - Valuation Methodology: Agreed methods for valuing partnership interests

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Professional Services

Retail

Manufacturing

Technology

Real Estate

Hospitality

Construction

Healthcare

Consulting

Agriculture

Creative Industries

Education and Training

Relevant Teams

Legal

Finance

Operations

Commercial

Executive

Business Development

Compliance

Corporate Governance

Risk Management

Relevant Roles

Business Owner

Managing Partner

CEO

CFO

Legal Counsel

Business Development Manager

Operations Manager

Finance Director

Company Secretary

Managing Director

Entrepreneur

Small Business Owner

Partnership Manager

Commercial Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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