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ARTICLE · 14 JUNE 2021

Agricultural Partnerships: Top Three Considerations

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The agricultural partnership is a common and often effective legal business structure that can be used by families to run their farm.

United KingdomReal Estate and Construction
Peter Snodgrass
Peter Snodgrass
Jennie Wheildon
Jennie Wheildon

The agricultural partnership is a common and often effective legal business structure that can be used by families to run their farm.

Despite being popular in farming communities they can cause confusion, especially when life muddles the situation. So, what should people consider when joining or creating an agricultural partnership?

The importance of a clear partnership agreement

Agricultural partnerships, just like any partnership, carry both successes and liabilities and anyone considering entering into one must keep this in mind.

Partnerships require 'utmost good faith' from the partners.

One of the most serious problems, which is often not dealt with, concerns ownership of farm assets - and the farm freehold in particular. This is a technical area, but of great significance in practice if a partner needs paying out for his or her share. This can happen on the death or retirement of a partner, or on the divorce of a partner.

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