Preliminary Partnership Agreement for Germany

Preliminary Partnership Agreement Template for Germany

A Preliminary Partnership Agreement under German law (Vorvertrag zur Gesellschaftsgründung) is a formal legal document that establishes the framework for a future partnership between two or more parties. This document, governed by German Civil Code (BGB) and Commercial Code (HGB), outlines the initial terms, conditions, and steps required to form a final partnership. It includes provisions for due diligence, confidentiality, exclusivity, and preliminary obligations while protecting all parties during the negotiation phase. The agreement serves as a binding commitment to negotiate in good faith towards a final partnership agreement while addressing key preliminary matters such as cost sharing, information exchange, and timeline for completion.

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What is a Preliminary Partnership Agreement?

The Preliminary Partnership Agreement is a crucial document used in German business practice when parties intend to form a partnership but need to establish preliminary terms and conduct due diligence before finalizing their relationship. This document is particularly relevant in situations where complex negotiations are anticipated, significant due diligence is required, or when parties need to formalize their commitment while working out detailed terms. Subject to German law, particularly the Civil Code (BGB) and Commercial Code (HGB), it provides legal protection during the negotiation phase while setting clear expectations and responsibilities. The agreement typically includes provisions for confidentiality, exclusivity, cost-sharing, and the process for moving towards a final partnership agreement. It's especially valuable in cross-border transactions, joint ventures, or when substantial assets or complex regulatory requirements are involved.

What sections should be included in a Preliminary Partnership Agreement?

1. Parties: Identification and details of all potential partners, including legal names, addresses, and registration details if applicable

2. Background: Context of the preliminary partnership, including the parties' intentions and general purpose of the proposed collaboration

3. Definitions: Key terms used throughout the agreement, ensuring consistent interpretation

4. Purpose and Scope: Outline of the intended partnership's business purpose and scope of activities

5. Duration: Timeline for the preliminary agreement and expected timeframe for establishing the final partnership

6. Due Diligence: Framework for information sharing and evaluation process

7. Confidentiality: Obligations regarding the protection of shared confidential information

8. Exclusivity: Commitment not to negotiate with other potential partners during the preliminary period

9. Costs and Expenses: Allocation of costs incurred during the preliminary phase

10. Steps to Final Agreement: Process and requirements for moving towards the final partnership agreement

11. Governing Law: Confirmation of German law application and jurisdiction

12. Termination: Conditions and process for terminating the preliminary agreement

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

1. Initial Capital Contributions: Preliminary agreements on capital contributions, used when partners want to establish initial financial commitments

2. Intellectual Property: Provisions for IP protection and ownership, necessary when IP assets are involved in discussions

3. Employee Matters: Framework for handling employment issues, relevant when staff transfers or hiring is contemplated

4. Real Estate: Preliminary arrangements regarding property, needed when real estate is central to the partnership

5. Regulatory Compliance: Specific regulatory requirements, included when the partnership involves regulated industries

6. Break Fee: Compensation provisions if one party withdraws, useful in high-stake negotiations

7. Milestone Planning: Key milestones and deadlines, included when specific achievements are required before final partnership

What schedules should be included in a Preliminary Partnership Agreement?

1. Initial Business Plan: Preliminary outline of the proposed partnership's business strategy and objectives

2. Due Diligence Checklist: List of required documents and information for mutual evaluation

3. Timeline: Detailed schedule of key dates and deadlines for moving towards final partnership

4. Required Approvals: List of necessary regulatory or third-party approvals

5. Initial Asset Schedule: Preliminary list of assets to be contributed to the partnership

6. Ownership Structure: Proposed ownership and voting rights structure

7. Form of Final Partnership Agreement: Draft outline or key terms of the intended final agreement

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

Germany

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Technology

Manufacturing

Professional Services

Real Estate

Healthcare

Retail

Financial Services

Energy

Construction

Agriculture

Media and Entertainment

Logistics

Education

Hospitality

Consulting

Relevant Teams

Legal

Corporate Development

Finance

Strategy

Business Development

Executive Leadership

Operations

Compliance

Risk Management

International Business

Mergers and Acquisitions

Relevant Roles

Chief Executive Officer

Managing Director

Legal Counsel

Business Development Manager

Chief Financial Officer

Partnership Manager

Corporate Development Director

Strategy Director

Investment Manager

Operations Director

Compliance Officer

Risk Manager

Company Secretary

Board Member

General Counsel

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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