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Family Business Partnership Agreement for Philippines

Family Business Partnership Agreement Template for Philippines

A comprehensive legal document governed by Philippine law that establishes the framework for a family-owned business partnership. This agreement outlines the rights, responsibilities, and relationships between family members in business operations, incorporating requirements from the Civil Code of the Philippines, Family Code, and Corporation Code. It addresses crucial aspects such as ownership structure, management roles, profit sharing, succession planning, and dispute resolution mechanisms while ensuring compliance with Philippine regulatory requirements and protecting both family and business interests.

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Family Business Partnership Agreement

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What is a Family Business Partnership Agreement?

The Family Business Partnership Agreement is essential for Philippine families seeking to formalize their business relationships and ensure long-term sustainability of their enterprises. This document is particularly crucial in the Philippine context, where family-owned businesses constitute a significant portion of the economy. It provides a legally binding framework that complies with Philippine legislation, including the Civil Code, Family Code, and Corporation Code, while addressing unique challenges of family-owned enterprises. The agreement typically covers capital contributions, profit sharing, management structure, succession planning, and dispute resolution mechanisms. It's designed to prevent common family business conflicts while promoting professional management and clear governance structures. This document is especially important given the Philippine cultural emphasis on family ties and the need to balance traditional values with modern business practices.

What sections should be included in a Family Business Partnership Agreement?

1. Parties: Identifies all family members entering into the partnership agreement, including their legal capacities and relationships

2. Background: Sets out the context of the family business, its history, and the purpose of forming the partnership

3. Definitions: Defines key terms used throughout the agreement, including family-specific terminology

4. Partnership Structure: Details the legal form of partnership, ownership percentages, and capital contributions of each family member

5. Management and Control: Establishes the management structure, voting rights, and decision-making processes

6. Roles and Responsibilities: Defines specific roles, duties, and responsibilities of family members in the business

7. Profit and Loss Sharing: Specifies how profits and losses will be distributed among family members

8. Capital Accounts: Details the maintenance and management of capital accounts for each partner

9. Transfer Restrictions: Sets out restrictions on transferring partnership interests, particularly to non-family members

10. Succession Planning: Outlines the process for business succession and transfer of interests to next generation

11. Dispute Resolution: Establishes procedures for resolving conflicts between family members

12. Termination and Dissolution: Specifies conditions and procedures for partnership termination or dissolution

13. Governing Law: Confirms the agreement is governed by Philippine law and relevant regulations

What sections are optional to include in a Family Business Partnership Agreement?

1. Family Employment Policy: Guidelines for employing family members, used when the family wants to establish clear criteria for family member employment

2. Family Council: Establishes a family governance body, recommended for larger family businesses

3. Education and Training: Provisions for developing next-generation family members, useful for succession planning

4. Non-Competition: Restricts family members from competing with the business, important for protecting business interests

5. Intellectual Property Rights: Addresses ownership and use of family business IP, necessary when IP is a significant asset

6. Family Member Exit Strategy: Detailed procedures for family members who wish to exit the business, important for larger families

7. Dividend Policy: Establishes guidelines for dividend distributions, useful for managing family expectations

8. Family Business Constitution: References to a separate family constitution, recommended for complex family businesses

What schedules should be included in a Family Business Partnership Agreement?

1. Schedule A - Initial Capital Contributions: Detailed list of initial capital contributions from each family member

2. Schedule B - Partnership Assets: Comprehensive inventory of partnership assets and their valuations

3. Schedule C - Family Member Roles: Current roles and positions held by family members in the business

4. Schedule D - Business Plan: Current business plan and strategic objectives

5. Schedule E - Valuation Method: Agreed method for valuating partnership interests

6. Appendix 1 - Family Member Contact Details: Contact information for all family members involved in the partnership

7. Appendix 2 - Required Regulatory Filings: List of necessary regulatory compliance documents

8. Appendix 3 - Family Business Policies: Compilation of adopted family business policies and procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions











































Clauses







































Relevant Industries

Retail and Consumer Goods

Manufacturing

Real Estate and Property Development

Agriculture and Farming

Food and Beverage

Hospitality and Tourism

Professional Services

Construction

Trading and Distribution

Technology and Digital Services

Healthcare Services

Education Services

Transportation and Logistics

Small and Medium Enterprises

Relevant Teams

Legal

Corporate Governance

Family Office

Executive Management

Board of Directors

Operations

Finance

Human Resources

Compliance

Business Development

Succession Planning

Risk Management

Strategic Planning

Family Council

Relevant Roles

Family Business Owner

Managing Partner

Family Council Chair

Chief Executive Officer

Chief Financial Officer

Operations Director

Business Development Manager

Family Office Manager

Succession Planning Advisor

Corporate Governance Officer

Legal Counsel

Family Business Consultant

Partnership Administrator

Board Member

Executive Director

General Manager

Human Resources Director

Compliance Officer

Industries








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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