Business partnership agreement: shares and buyout

This is a business partnership agreement worksheet that works the figures the agreement's capital and distribution clauses have to state. Each partner's capital over the total is their ownership share; the year's profit times each share is each partner's distribution; and a valuation of the business times a partner's share is what buying that partner out costs at that valuation. The agreement says how shares are set and how a buyout is priced; the worksheet makes the figures exact from your own capital, profit and valuation, publishes no valuation method and no return, and computes free on the page with no account. The paid plan keeps the partners, their shares and every capital change against the record.

Shares: capital over the total

Three partners putting in $60,000, $30,000 and $10,000 have $100,000 of capital and hold 60%, 30% and 10%. That is the usual rule and the worksheet applies it; a partnership that wants shares to differ from capital, for sweat or for a name, writes that rule into the agreement instead, and the worksheet's shares become the figure the rule departs from.

Distributions: the year's profit, split by share

$120,000 of profit at 60%, 30% and 10% is $72,000, $36,000 and $12,000, before any salary, reserve or tax set-aside the agreement provides for. Enter the profit after those if the agreement takes them first; the worksheet splits whatever figure you give it by the shares above, which is what the distributions clause has to say in words.

The buyout: a share at a valuation

At a $400,000 valuation, buying out the 30% partner costs $120,000. The valuation method is the agreement's hardest clause and the worksheet takes the valuation as an input rather than pretending to compute it: a multiple, an appraisal or an agreed figure, whichever the partners wrote down. Termslane Pro keeps the partners, the shares after each capital change and the buyout terms on one record.