This document is a deed of variation to a partnership. It can be used where the profit share between the partners is changing.
The basis of splitting partnership business profits between partners is usually governed by the terms of the partnership agreement.
Using this precedent
This precedent deed can be used when the partners agree to change the original or documented profit share ratio between the partners. The change may result in a gain to a few partners, and a loss to others. Those partners who stand to gain will often compensate the sacrificing partners.
Partnership agreements will likely deal with the manner in which profits and losses are apportioned in the partnership (see “Partnership agreement – general (long form)”). This deed would act as an amendment to the relevant clause in the partnership agreement.
Care should be taken to ensure the variation does not amount to a change in property rights, as this would result in stamp duty, income and capital gains tax implications. Partners using this deed may require independent advice in relation to any duty or tax implications.
This document has been authored for Lexis Nexis by Michael Heraghty, Partner, TressCox Lawyers, Rosemarie Ryan, Barrister and Jacqui L Walker, Principal Lawyer, J L Walker Law.
This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.