The Herrington Carmichael Corporate team advised the partners of a long-established family farming partnership on the preparation of a bespoke and robust partnership agreement. The new agreement was carefully tailored to reflect the existing ownership and operational arrangements, with particular focus on the treatment of land held by the partners and its separation from the general capital and assets of the partnership.
The Challenge
It was important to create a clear legal distinction between assets owned personally by family members and those belonging to the partnership because of intergenerational planning and accountancy considerations.
Particular consideration also had to be given to circumstances in which land might be withdrawn from partnership use. Any such arrangements needed to recognise the practical realities of farming operations, including harvesting seasons and livestock management, to avoid disruption to the business and preserve continuity of production.
In addition, the family required a framework that supported future generational succession, reflected their long-term objectives for the farming enterprise, and provided clarity regarding the management of agricultural land, entitlement to income, and participation in government agricultural schemes.
Our Approach
Herrington Carmichael were instrumental in ensuring that the legal documentation accurately reflected both the commercial objectives of the family and the practical requirements of the farming business. This included:
- Reviewing existing ownership and operational arrangements;
- Drafting clear and comprehensive provisions of an agricultural farming partnership agreement;
- Advising on the management and use of family-owned land within the partnership structure.
- Ensuring clarity regarding the treatment of income, proceeds, and partnership assets.
- Working alongside specialist advisers to align the legal arrangements with broader tax and financial planning objectives.
The Outcome
The completed partnership agreement provided the family with a robust governance framework that balanced legal certainty with the practical needs of a working farming business. By clearly distinguishing between land ownership and partnership assets, and by incorporating carefully considered succession and land-use provisions, the agreement reduced the potential for future disputes while supporting the continued operation and long-term sustainability of the farming enterprise.
The clients expressed their appreciation for the time, care and attention to detail shown by the Herrington Carmichael team throughout the matter.
Lucinda Cameron, Solicitor, commented “We were delighted to support the family in formalising their arrangements in a way that preserves their legacy and provides clarity for the future. We wish them continued success.”
