Business Ownership Agreement Template for England and Wales

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Key Requirements PROMPT example:

Business Ownership Agreement

"I need a Business Ownership Agreement for my new tech startup with three co-founders, where we'll have different equity stakes (51%, 29%, 20%) and specific provisions for future investor buy-in opportunities starting January 2025."

Document background
The Business Ownership Agreement is essential for any multi-owner business operation in England and Wales. It serves as the foundational document that outlines how the business will be owned, operated, and managed. This agreement is particularly crucial when establishing new business relationships or formalizing existing ones, providing clear guidelines on capital contributions, profit sharing, decision-making authority, and exit procedures. It helps prevent future disputes by addressing potential scenarios upfront and ensuring all parties understand their rights and obligations under English and Welsh law.
Suggested Sections

1. Parties: Identification and details of all business owners and stakeholders

2. Background: Context of the business relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement including interpretation provisions

4. Business Structure: Legal form of the business and ownership structure

5. Capital Contributions: Initial and ongoing financial commitments of each owner

6. Management Rights: Decision-making processes, authority levels, and voting rights

7. Profit Distribution: Method and timing of profit sharing between owners

8. Transfer Restrictions: Rules regarding sale or transfer of ownership interests

9. Exit Provisions: Procedures for owner withdrawal, retirement, or termination

10. Dispute Resolution: Procedures for resolving disagreements between owners

Optional Sections

1. Non-Compete Provisions: Restrictions on owners engaging in competitive activities during and after ownership

2. Intellectual Property Rights: Ownership and use of intellectual property developed by or for the business

3. Death/Incapacity Provisions: Succession planning and procedures in case of death or incapacity of owners

4. Tag-Along/Drag-Along Rights: Special provisions for share sales in larger ownership structures

5. Confidentiality: Obligations regarding confidential information and trade secrets

Suggested Schedules

1. Schedule 1 - Share Capital Table: Detailed breakdown of ownership percentages and share classes

2. Schedule 2 - Business Plan: Initial business strategy and financial projections

3. Schedule 3 - Asset Register: Comprehensive list of business assets and their ownership status

4. Schedule 4 - Deed of Adherence: Template document for new owners joining the business

5. Schedule 5 - Reserved Matters: List of decisions requiring special majority or unanimous approval

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

Relevant legal definitions
Clauses
Industries

Companies Act 2006: Primary legislation governing company formation, structure, management, directors' duties, shareholder rights, and share capital provisions

Partnership Act 1890: Governs traditional partnerships, including partners' rights and duties, partnership property, and dissolution procedures

Limited Liability Partnerships Act 2000: Regulates LLP structures, including member rights and responsibilities and internal management provisions

Small Business, Enterprise and Employment Act 2015: Covers transparency requirements and maintains register of persons with significant control

Financial Services and Markets Act 2000: Relevant for businesses involved in regulated financial activities

Competition Act 1998: Addresses anti-competitive practices and market dominance considerations

Employment Rights Act 1996: Relevant when business owners are also employees of the company

Corporation Tax Act 2010: Governs corporate tax obligations and requirements for businesses

Income Tax Act 2007: Regulates personal income tax implications for business owners

UK GDPR and Data Protection Act 2018: Governs data protection requirements and privacy compliance obligations

Civil Procedure Rules: Procedural rules governing civil litigation in England and Wales

Arbitration Act 1996: Framework for alternative dispute resolution through arbitration

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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