Fixed Share Partnership Agreement for the United Kingdom

Fixed Share Partnership Agreement Template for England and Wales

A Fixed Share Partnership Agreement is a legal document governed by English and Welsh law that establishes the terms under which an individual joins a partnership as a fixed share partner. It defines the partner's rights, responsibilities, and financial arrangements, including their guaranteed income, profit share, and capital contribution requirements. The agreement operates within the framework of the Partnership Act 1890 and related legislation, providing clarity on management participation, decision-making rights, and exit provisions.

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What is a Fixed Share Partnership Agreement?

The Fixed Share Partnership Agreement is a crucial document used when professional partnerships in England and Wales bring in new partners on a fixed share basis, representing an intermediate step between salaried status and full equity partnership. This agreement defines the specific terms of the partnership relationship, including fixed drawings, profit share arrangements, and partnership obligations. It provides security for both the partnership and the incoming partner by clearly establishing expectations, responsibilities, and financial arrangements. The document must comply with English partnership law and relevant regulatory requirements, particularly in regulated sectors such as legal or financial services.

What sections should be included in a Fixed Share Partnership Agreement?

1. Parties: Identifies all parties to the agreement including the partnership and incoming partner

2. Background: Context of the agreement and partnership structure

3. Definitions: Key terms used throughout the agreement

4. Partnership Interest: Details of fixed share and profit-sharing arrangements

5. Capital Contribution: Requirements for capital contribution if any

6. Duties and Obligations: Partner responsibilities and commitments

7. Management Participation: Voting rights and management involvement

8. Financial Arrangements: Drawing rights, profit share calculation and payment terms

9. Termination: Circumstances and process for ending the partnership

What sections are optional to include in a Fixed Share Partnership Agreement?

1. Restrictive Covenants: Non-compete and confidentiality provisions for protecting business interests

2. Professional Indemnity: Insurance requirements and liability provisions for regulated professions or high-risk services

3. Promotion to Equity: Conditions and process for progression to equity partnership status

What schedules should be included in a Fixed Share Partnership Agreement?

1. Capital Account Details: Breakdown of capital contribution requirements and calculations

2. Profit Share Calculation: Detailed formula for calculating fixed share and any variable elements

3. Partner Requirements: Specific performance targets or requirements

4. Partnership Deed Extract: Relevant sections from main partnership deed affecting fixed share partners

5. Professional Requirements: Regulatory or professional body requirements if applicable

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

England and Wales

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Partnership Act 1890: Primary legislation that defines partnerships, establishes basic partnership rights, sets out default provisions for partner relationships, and covers profit sharing and liability principles

Limited Liability Partnerships Act 2000: Governs the structure and operation of Limited Liability Partnerships (LLPs), relevant if the partnership is or plans to become an LLP

Equality Act 2010: Prevents discrimination in professional partnerships and ensures equal treatment of partners in all aspects of the partnership

Employment Rights Act 1996: May be applicable if fixed share partners could be deemed 'workers', impacts their rights and protections within the partnership

Income Tax Act 2007: Governs the tax treatment of partnership income and establishes partner taxation status

Finance Acts (various): Contains tax provisions affecting partnerships and National Insurance contribution requirements

Professional Body Regulations: Includes specific regulations such as SRA rules for legal partnerships or ICAEW regulations for accounting firms, depending on the partnership's profession

Money Laundering Regulations 2017: Anti-money laundering requirements that may apply to the partnership's activities and operations

Companies Act 2006: Relevant for financial arrangements and applicable if converting to LLP structure, contains provisions affecting partnership governance

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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