This document is a clause which can be inserted into a partnership agreement, allowing a partner to bring a family member into the business.

When a partnership is constituted by:

• members of the same family, such as siblings, who have their own children; or
• partners who are unrelated but wish to have the right to bring their children into the partnership business at a later stage,

it is common to include a nomination clause in the partnership agreement setting out the process to be followed if a partner wishes to bring his or her children into the business.

Where there is more than one family involved in the business, it is advisable to limit the number of family members from each family to join the partnership, and also stipulate the type of qualifications required of new partners to the business.

Using this precedent

This clause can be inserted into the separate precedent “Partnership agreement (short form, general)”, or used in any partnership agreement as required.

When inserting this optional clause into an agreement, care must be taken to ensure that the agreement remains consistent. Cross-references, definitions and schedules should all be checked.

This document has been authored for LexisNexis by Elise Margow, Principal, Legally Speaking.

This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.