Document background
The Partnership Buy-Sell Agreement is an essential document for business partnerships operating in Malaysia, providing a structured framework for handling ownership transitions. This agreement becomes crucial when partners need to address potential future scenarios such as retirement, death, disability, or voluntary exit of partners. It serves as a pre-negotiated contract that helps avoid disputes and ensures business continuity by clearly defining the process for valuing and transferring partnership interests. The agreement must comply with Malaysian legal requirements, including the Partnership Act 1961, Contracts Act 1950, and relevant tax legislation. It typically includes provisions for valuation methods, payment terms, funding mechanisms (often through life insurance), and procedures for executing transfers. The agreement also helps protect the interests of both departing partners and those continuing the business, while maintaining the partnership's stability during ownership transitions.
