Co Ownership Business Agreement Template for New Zealand

A comprehensive legal agreement governed by New Zealand law that establishes and regulates the relationship between two or more parties who jointly own and operate a business. The document outlines ownership percentages, management responsibilities, decision-making processes, profit distribution, dispute resolution mechanisms, and exit strategies. It ensures compliance with New Zealand's Partnership Act 1908 and related legislation while providing a clear framework for co-owners to manage their business relationship effectively and mitigate potential conflicts.

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What is a Co Ownership Business Agreement?

The Co-Ownership Business Agreement is a crucial legal document used in New Zealand when two or more parties wish to establish a formal structure for jointly owning and operating a business. This document becomes essential when parties need to clearly define their ownership rights, responsibilities, and operational procedures while ensuring compliance with New Zealand legislation, including the Partnership Act 1908 and Companies Act 1993. It is particularly valuable for new business ventures, family businesses, professional practices, and existing businesses transitioning to shared ownership. The agreement typically includes detailed provisions for ownership structure, capital contributions, profit sharing, decision-making processes, dispute resolution, and exit strategies, providing a solid foundation for the business relationship and helping prevent future disagreements.

What sections should be included in a Co Ownership Business Agreement?

1. Parties: Identifies all co-owners with their full legal names and addresses

2. Background: Outlines the context of the agreement, including the business nature and co-owners' intention to jointly own and operate the business

3. Definitions: Defines key terms used throughout the agreement

4. Ownership Structure: Details the ownership percentages and capital contributions of each co-owner

5. Business Operations: Establishes how the business will be managed, including decision-making processes and voting rights

6. Financial Management: Covers financial obligations, profit distribution, and accounting requirements

7. Rights and Obligations: Specifies the rights and responsibilities of each co-owner

8. Decision Making: Details the process for making business decisions, including voting thresholds for different types of decisions

9. Transfer of Ownership: Establishes rules for transferring ownership interests, including first right of refusal

10. Dispute Resolution: Outlines the process for resolving disputes between co-owners

11. Term and Termination: Specifies the agreement duration and circumstances for termination

12. General Provisions: Includes standard legal clauses such as governing law, notices, and amendments

What sections are optional to include in a Co Ownership Business Agreement?

1. Intellectual Property: Required when the business owns or develops significant IP assets

2. Non-Competition: Include when co-owners want to restrict their ability to compete with the business

3. Death or Incapacity: Important when co-owners want specific provisions for succession planning

4. Insurance Requirements: Include when specific insurance coverage is required for the business or co-owners

5. Employment of Co-owners: Needed when co-owners will also be employees of the business

6. External Financing: Include when the business anticipates taking on external debt or investment

7. Property Management: Required when the business owns or leases significant physical assets

8. Confidentiality: Include when there's sensitive business information to protect

What schedules should be included in a Co Ownership Business Agreement?

1. Schedule 1: Capital Contributions: Detailed list of initial and subsequent capital contributions by each co-owner

2. Schedule 2: Business Assets: Comprehensive inventory of business assets and their agreed values

3. Schedule 3: Ownership Percentages: Current ownership structure and any historical changes

4. Schedule 4: Management Structure: Detailed outline of management roles and responsibilities

5. Schedule 5: Distribution Policy: Specific rules and formulas for profit distribution

6. Appendix A: Business Plan: Initial business plan and strategy

7. Appendix B: Valuation Method: Agreed methodology for valuing the business and ownership shares

8. Appendix C: Required Insurances: List of required insurance policies and coverage levels

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

Cost

Free to use

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