How can I sell a general partnership?

Selling a general partnership (VOF) is complex because the partnership is based on an agreement between the partners: you cannot simply transfer your share to a third party — the cooperation of the fellow partners is required for this. Upon sale, the assets and liabilities (including employees) are transferred, and the buyer can continue the VOF or convert it into a private limited company (BV), with tax implications. Below, you can read why the sale is difficult and how to approach it step by step.

Why is selling a general partnership difficult?

A general partnership (VOF) is a partnership between two or more entrepreneurs, easy to set up and with the advantage that you share risks, costs, and knowledge. Disadvantages are the personal liability of the partners and the difficulty in selling the business.

The general partnership is established on the basis of a general partnership agreement, and that agreement maintains the partnership. Consequently, a single partner cannot simply transfer his share or his contractual legal relationship with the fellow partners to a third party. The consent and cooperation of the other partners are required for this. If they decide to sell jointly, the assets and liabilities are transferred, including the employees — which, among other things, complicates the valuation.

The buyer can then choose to continue the general partnership or convert it into, for example, a private limited company (BV), with tax consequences. TODO_VERIFY: the tax consequences of transfer and conversion (such as cessation profit and contribution facilities) are specialized and subject to change — have this reviewed from a tax perspective.

Selling a general partnership step by step

A sale typically proceeds as follows:

1. prepare a good information memorandum and financial plan;
2. wait for non-binding offers and then start the real negotiations;
3. set out the main points in a letter of intent or letter of intent;
4. Draft the final acquisition agreement.

Sometimes the sale proceeds differently, for example if one owner wishes to buy out the other(s). In that case, the general partnership generally adopts a different legal form.

Pay attention to agreements between the partners

When selling, take into account agreements between the partners — whether oral or laid down in the partnership agreement. If the partners do not agree on the sale, the contract may, for example, contain a dispute resolution clause that you must take into account.

Frequently Asked Questions

Can I just sell my share in a general partnership?

No. Because the general partnership is based on an agreement, you can only transfer your share or legal relationship with the consent and cooperation of the co-partners.

What exactly is transferred upon the sale of a general partnership?

The assets and liabilities, including employees. Their valuation is often a bottleneck.

Can the buyer convert the general partnership into a private limited company?

Yes. The buyer can continue the general partnership or convert it into, for example, a private limited company, but must take the tax consequences into account.

What if the partners disagree about the sale?

In that case, the agreements in the partnership contract apply, such as a dispute resolution clause. If these are lacking, legal advice or the court can provide a solution.

Need help selling your general partnership?

The sale of a general partnership involves many legal and tax complexities. We advise you on the sale, resolve disputes between partners, and draft the necessary agreements, such as a letter of intent or an acquisition agreement.

View our corporate law or schedule a no-obligation intake consultation.