Farming Partnerships: The Pitfalls

Family members involved in farming operations may unwittingly create various partnerships over many years. These have significant legal consequences that may only become apparent in a moment of crisis, such as the death of a family member or a family fallout. To avoid protracted disputes and further breakdown of relationships, it is always advisable to ensure that partnership agreements and wills are consistent and correctly reflect the intentions of the parties.

Partnerships are created automatically

Unlike companies, partnerships do not have to be registered. If people carry on business together with a view to a making a profit, a partnership is automatically created even if they do not consciously agree to this. Each time a family member stops being part of a farming business – by choice, or because of death or a dispute – that particular partnership ceases to exist, and a new partnership is created between the remaining family members who continue to run the