Lawyers spend far more time sorting out partnership disputes and wrangles than it takes to set up an agreement properly, writes Suzie Horne.
They also say that far too many farming families take unnecessary risks by operating partnerships without a written agreement. Where this is the case, the Partnership Act of 1890 applies and can hold some nasty surprises, as the case studies in Burges Salmon senior associate Sian Edmunds’ partnership agreements article shows.
So, if you don’t want a 122-year old law to dictate who has what rights when a partner dies or retires, or when a dispute arises in the business then a considered and well-drafted agreement is the answer.
A further incentive is that it will usually cost far more in legal fees to sort out the problems caused by the lack of a written agreement then to pay for an agreement to be drawn up in the first place – with not only legal but also tax advice.