Document background
The Buyout Agreement Between Partners is a critical document used when one or more partners wish to exit a partnership business while the remaining partners continue operations. This agreement, governed by Indian law, particularly the Indian Partnership Act, 1932, provides a structured framework for transferring partnership interests. It becomes necessary when partners decide to part ways due to retirement, strategic differences, or other business reasons. The document covers essential elements including valuation methodology, payment terms, liability allocation, and post-exit obligations. It also addresses compliance requirements under various Indian legislative frameworks, including tax implications under the Income Tax Act, 1961, and stamp duty requirements under the Indian Stamp Act, 1899. The agreement is crucial for ensuring a smooth transition while minimizing the risk of future disputes.
