Partner Exit Agreement for Philippines

Partner Exit Agreement Template for Philippines

A comprehensive legal agreement governed by Philippine law that formalizes the withdrawal of a partner from a partnership. This document outlines the terms and conditions of the partner's exit, including the transfer of partnership interests, financial settlements, ongoing obligations, and mutual releases. It ensures compliance with the Civil Code of the Philippines and relevant business regulations while protecting the interests of both the departing partner and the continuing partnership. The agreement addresses crucial aspects such as valuation, payment terms, confidentiality, non-compete provisions, and the handling of client relationships.

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What is a Partner Exit Agreement?

The Partner Exit Agreement is a critical document used when a partner decides to leave or is required to leave a partnership in the Philippines. This agreement is essential for professional and business partnerships operating under Philippine jurisdiction, particularly those governed by the Civil Code of the Philippines and related business regulations. It becomes necessary when triggers such as retirement, career change, disagreements, or strategic realignment necessitate a partner's departure. The document typically includes detailed provisions for financial settlements, transfer of ownership interests, client transition arrangements, confidentiality obligations, and non-compete restrictions. It serves to protect both the departing partner's rights and the continuing partnership's interests while ensuring compliance with local laws and regulations. The agreement is particularly important in professional services firms, family businesses, and other partnership structures where clear exit terms are crucial for business continuity and risk management.

What sections should be included in a Partner Exit Agreement?

1. Parties: Identification of all parties to the agreement, including the departing partner and remaining partners

2. Background: Context of the partnership and reasons for the partner exit

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

4. Effective Date and Notice: Specification of when the exit becomes effective and notice requirements

5. Resignation and Relinquishment: Formal resignation terms and relinquishment of partnership rights

6. Purchase Price and Payment Terms: Details of the buyout amount and payment structure

7. Transfer of Partnership Interest: Process and terms for transferring the departing partner's interest

8. Release and Discharge: Mutual release of claims and liabilities

9. Confidentiality Obligations: Ongoing confidentiality requirements for the departing partner

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

11. Return of Property: Requirements for returning partnership property and materials

12. Representations and Warranties: Standard representations and warranties from all parties

13. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction details

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

15. General Provisions: Standard boilerplate provisions including severability, entire agreement, etc.

What sections are optional to include in a Partner Exit Agreement?

1. Ongoing Consulting Arrangement: Terms of any consulting relationship with the departing partner, if applicable

2. Transition Period: Details of any transition period and associated responsibilities, if needed

3. Client Communication: Protocol for communicating the exit to clients, if partner had client relationships

4. Intellectual Property Rights: Special provisions for IP rights if the partner was involved in IP creation

5. Tax Indemnification: Specific tax-related provisions if complex tax implications exist

6. Employee Matters: Provisions relating to employees if the departing partner had direct reports

7. Insurance and Liability: Special insurance provisions if partner had specific coverage or liability exposure

What schedules should be included in a Partner Exit Agreement?

1. Schedule A - Calculation of Purchase Price: Detailed breakdown of the partnership interest valuation

2. Schedule B - Payment Schedule: Detailed timeline and terms of payment installments

3. Schedule C - Partnership Assets: Inventory of relevant partnership assets affected by the exit

4. Schedule D - Outstanding Obligations: List of any outstanding obligations or liabilities

5. Schedule E - Client Relationships: List of client relationships and transition arrangements

6. Schedule F - Confidential Information: Detailed description of confidential information covered

7. Appendix 1 - Partnership Agreement Extract: Relevant excerpts from the original partnership agreement

8. Appendix 2 - Required Notices: Forms of any required notices to authorities or third parties

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

Philippines

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Legal Services

Accounting and Audit

Management Consulting

Architecture and Engineering

Medical Practice

Real Estate

Financial Services

Professional Services

Technology Services

Construction

Manufacturing

Retail and Distribution

Relevant Teams

Legal

Finance

Human Resources

Compliance

Risk Management

Corporate Secretariat

Business Development

Operations

Partner Administration

Executive Leadership

Relevant Roles

Managing Partner

Senior Partner

Partner

Legal Counsel

Corporate Secretary

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

HR Director

Finance Director

Business Development Director

Partnership Administrator

Compliance Officer

Risk Manager

Professional Services 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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