Partnership Separation Agreement for Hong Kong

Partnership Separation Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that formalizes the dissolution and separation of a partnership, detailing the terms and conditions under which the partners agree to terminate their business relationship. The agreement addresses key aspects including asset division, liability allocation, client distribution, and ongoing obligations, while ensuring compliance with Hong Kong's Partnership Ordinance (Cap. 38) and related legislation. It provides a clear framework for the separation process, protecting all parties' interests and minimizing the risk of future disputes.

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What is a Partnership Separation Agreement?

The Partnership Separation Agreement is a crucial document used when partners decide to end their business relationship and require a formal framework for dissolution. It is particularly relevant in Hong Kong's dynamic business environment, where partnerships are a common business structure across various industries. This document, governed by Hong Kong law and compliant with the Partnership Ordinance (Cap. 38), provides comprehensive coverage of all aspects of the separation, including asset division, liability allocation, client relationships, and post-separation obligations. It serves as both a roadmap for the separation process and a legally binding agreement that protects all parties' interests, helping to prevent future disputes and ensuring a smooth transition for the business and its stakeholders.

What sections should be included in a Partnership Separation Agreement?

1. Parties: Identification of all partners involved in the separation agreement

2. Background: Brief history of the partnership, reason for separation, and context of the agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Effective Date: Specification of when the separation becomes effective

5. Division of Partnership Assets: Detailed arrangement for the division of all partnership assets

6. Assumption of Liabilities: Allocation of existing partnership liabilities among partners

7. Client and Contract Arrangements: Distribution and handling of existing clients and contracts

8. Financial Settlements: Terms of financial settlements including capital accounts and profit sharing

9. Confidentiality: Obligations regarding confidential information post-separation

10. Non-Compete and Non-Solicitation: Restrictions on competitive activities and client solicitation

11. Release and Indemnification: Mutual release of claims and indemnification provisions

12. Notices: Process for giving formal notices under the agreement

13. Governing Law: Specification of Hong Kong law as governing law

14. Dispute Resolution: Procedures for resolving any disputes arising from the agreement

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

1. Intellectual Property Rights: Division of IP rights where the partnership owns significant IP assets

2. Ongoing Projects: Handling of incomplete projects and work in progress

3. Employee Arrangements: Distribution of responsibilities for employees if the partnership has staff

4. Insurance Matters: Arrangements for existing insurance policies and future coverage

5. Tax Matters: Specific tax arrangements and responsibilities if complex tax issues exist

6. Pending Litigation: Handling of any ongoing legal proceedings involving the partnership

7. Use of Partnership Name: Agreements regarding future use of the partnership name and branding

8. Transition Services: Temporary services to be provided between partners during transition

What schedules should be included in a Partnership Separation Agreement?

1. Schedule 1 - Asset Register: Comprehensive list of partnership assets and their agreed distribution

2. Schedule 2 - Liability Register: List of all partnership liabilities and their allocation

3. Schedule 3 - Client List: Complete list of clients and their allocation between partners

4. Schedule 4 - Financial Statement: Current financial position of the partnership

5. Schedule 5 - Settlement Calculations: Detailed calculations of financial settlements between partners

6. Appendix A - Handover Protocol: Detailed procedures for transferring assets, clients, and responsibilities

7. Appendix B - Required Notices: Templates for notices to clients, suppliers, and other stakeholders

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

Hong Kong

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Relevant Industries

Professional Services

Legal Services

Accounting & Audit

Management Consulting

Architecture & Design

Medical Practices

Real Estate

Financial Services

Technology Services

Engineering Services

Trading & Distribution

Creative Services

Construction

Retail

Relevant Teams

Legal

Finance

Compliance

Operations

Business Development

Risk Management

Administrative

Human Resources

Client Relations

Partnership Management

Relevant Roles

Managing Partner

Senior Partner

Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Company Secretary

Business Development Director

Operations Director

Finance Manager

Partnership Administrator

Compliance Officer

Risk Manager

Account Manager

Business Manager

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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