Partnership Shareholder Agreement for Australia

Partnership Shareholder Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that combines elements of both partnership and shareholder agreements. It establishes the relationship between partners who are also shareholders in a corporate entity, defining their rights, obligations, and responsibilities. The document covers crucial aspects such as ownership structure, management rights, profit sharing, decision-making processes, transfer restrictions, and exit mechanisms, while ensuring compliance with both federal and state-level Australian legislation including the Corporations Act 2001 and relevant Partnership Acts.

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What is a Partnership Shareholder Agreement?

The Partnership Shareholder Agreement is essential for businesses operating under a hybrid structure in Australia, where partners also hold shares in a corporate entity. This document is typically used when establishing new professional partnerships, restructuring existing businesses, or admitting new partners/shareholders. It provides a comprehensive framework that addresses both partnership and corporate governance aspects, ensuring clarity in ownership, management, profit sharing, and dispute resolution. The agreement must comply with Australian federal legislation, particularly the Corporations Act 2001, as well as state-specific Partnership Acts. It's particularly crucial for professional service firms, family businesses, and joint ventures where participants want to combine the benefits of partnership with corporate structure protections.

What sections should be included in a Partnership Shareholder Agreement?

1. Parties: Identifies all shareholders and partners who are party to the agreement

2. Background: Sets out the context of the agreement, including business history and purpose

3. Definitions and Interpretation: Defines key terms and establishes rules for interpreting the agreement

4. Partnership Structure: Details the nature of the partnership, ownership structure, and capital contributions

5. Shareholding Structure: Outlines the distribution of shares, share classes, and rights attached to shares

6. Management and Decision Making: Establishes governance framework, voting rights, and decision-making processes

7. Financial Matters: Covers profit distribution, dividend policy, capital calls, and financial reporting requirements

8. Transfer of Shares: Sets out procedures and restrictions for transferring shares, including pre-emptive rights

9. Exit Provisions: Details mechanisms for partner/shareholder exit, including buy-sell provisions

10. Dispute Resolution: Establishes procedures for resolving conflicts between partners/shareholders

11. Confidentiality: Defines confidential information and obligations to maintain confidentiality

12. General Provisions: Contains standard boilerplate clauses including notices, amendments, and governing law

What sections are optional to include in a Partnership Shareholder Agreement?

1. Tag-Along and Drag-Along Rights: Optional provisions protecting minority shareholders in case of sale to third parties

2. Intellectual Property Rights: Required when the partnership owns or develops significant IP assets

3. Non-Competition and Non-Solicitation: Added when partners need to be restricted from competing activities

4. Death and Incapacity: Specific provisions for handling ownership transition in case of death or incapacity

5. Put and Call Options: Optional mechanisms for forced buy-outs in specific circumstances

6. International Operations: Required when the partnership operates across multiple jurisdictions

7. Employee Shareholders: Needed when employees hold shares in the partnership

8. Special Industry Requirements: Industry-specific provisions required for regulated sectors

What schedules should be included in a Partnership Shareholder Agreement?

1. Schedule 1 - Details of Partners and Shareholdings: Complete list of partners, their shareholdings, and contact details

2. Schedule 2 - Initial Capital Contributions: Detailed breakdown of each partner's initial capital contribution

3. Schedule 3 - Business Plan: Initial business plan and strategic objectives

4. Schedule 4 - Deed of Accession: Template for new partners/shareholders joining the agreement

5. Schedule 5 - Valuation Methodology: Agreed methods for valuing shares and partnership interests

6. Schedule 6 - Reserved Matters: List of decisions requiring special majority or unanimous consent

7. Schedule 7 - Key Performance Indicators: Performance metrics and targets for the partnership

8. Appendix A - Company Constitution: Copy of the company's constitution or reference to it

9. Appendix B - Compliance Requirements: Summary of regulatory and compliance obligations

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

Legal Services

Accounting and Financial Services

Medical Practices

Architecture and Design

Engineering Consultancies

Technology and Software Development

Real Estate and Property Development

Management Consulting

Creative Agencies

Manufacturing

Retail and Hospitality

Relevant Teams

Legal

Corporate Governance

Finance

Executive Leadership

Board of Directors

Company Secretariat

Corporate Affairs

Risk Management

Compliance

Business Development

Relevant Roles

Managing Partner

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Company Secretary

Corporate Lawyer

Partner

Senior Partner

Board Director

Managing Director

Business Development Director

Equity Partner

Founding Partner

General Counsel

Finance 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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