Deed of Adherence to Partnership Agreement
This Deed of Adherence is to be used when a new partner joins a partnership. Click here for the Deed of Adherence to a Shareholder’s Agreement
This Deed of Adherence can be used with the Simply-docs Long Partnership Agreement (which was previously named ‘Partnership Agreement’), and also with most general partnership agreement (which have been drafted by a third party, not Simply-docs). It is not appropriate for use where a new Member joins an LLP.
If your partnership was formed under the Simply-docs ‘Basic Partnership Agreement’, you can use the Deed of Adherence (Basic Partnership Agreement), which is drafted specifically to correspond to that agreement. Click here for the Deed of Adherence to Basic Partnership Agreement
This Deed of Adherence is created as a deed (rather than a simple agreement) to avoid problems that may occur as a result of any lack of consideration by any of the original partners.
This Deed of Adherence works by binding the new partner into the original partnership agreement, such that they undertake to perform the same obligations as the original partners, and has the same entitlements, all with effect from the date of the Deed.
The original partners provide an indemnity to the new partner against losses occurring before he joined the partnership.
You will need to check the original partnership agreement and locate the clause that permits the admission of new partners. This clause number will then need to be entered into the third paragraph of the “Background” section.
The addition of a new partner will change the percentage share of profits and losses for all partners. This adjustment is managed by Schedule 2 of the Deed, which sets out the share of profits and losses after the new partner has joined, and replaces wording in the original agreement. You will need to check your original agreement to locate the clause or schedule setting out the profit sharing arrangements. The clause number or schedule reference will then need to be inserted into Clause 6 “Variation of the Partnership Agreement”.
The Deed has to be executed by ALL the partners in the partnership, together with the joining partner. The Deed should be dated on the date that the new partner joins the partnership. Please note that HMRC must be notified of any partnership changes.
This document is in open format. Enter the requisite details in the highlighted fields and, if necessary, adjust the wording to suit your purposes. Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
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