My husband and I are preparing to purchase a 6 unit apartment with two other couples. Does anyone have any suggestions for an "exit" clause should one of us need/want to exit the contract? Someone suggested incorporating (with "right of 1st refusal"), but we`d be taxed 52% on passive income. Any other suggestions? This joint venture is new for all three of us, and I`d appreciate any feedback.
Exit clause in Joint Venture
- Thread starter tbourassa
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Your lawyer will prepare a Buy/Sell agreement as a section of your JVA. All Partnerships, Joint Ventures and Corporations with multiple parties in ownership really must have one. They come in all types, and should be designed by an experienced lawyer after a conversation with all three parties together (he or she will know exactly what to ask you all).
Hope that helps,
Hope that helps,
- Joined
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QUOTE (tbourassa @ Apr 29 2008, 10:06 PM) My husband and I are preparing to purchase a 6 unit apartment with two other couples. Does anyone have any suggestions for an "exit" clause should one of us need/want to exit the contract? Someone suggested incorporating (with "right of 1st refusal"), but we`d be taxed 52% on passive income. Any other suggestions? This joint venture is new for all three of us, and I`d appreciate any feedback.
1. There is the old shotgun clause: One party names a price and the other party(s) either buys it for that price or sells their share to the exiting party for that price! (I tried this one with a joint timeshare with my ex as it was a pain when it came time to collect her maintenance fees. I had purchased a 2nd week and was hoping that she would buy out my half and then we each would have our own annual week in our own names. I told her to make an offer and i would sell my half or buy out her half if i felt the offer was too low - she just said to leave things as they were... sheeeshh...
I later was able to get the timeshare folks to change the joint week to 2 bi annual ones so each of us now have our own separate titles to solve that problem.
)
2. Another idea is to let someone new take over the terms of the contract so long as the other 2 parties agree to who it is.
3. is to sell off the property and dissolve the contract.
Here are a few links on JV agreements....
http://www.lawdepot.com/contracts/joint-venture-agreement/index.php?loc=CA&a=t
Here is a JV checklist... (Sask) http://www.canadabusiness.ca/servlet/ContentServer?cid=1083346949765&lang=en&pagename=CBSC_SK%2Fdisplay&c=GuideFactSheet
Dean
[email protected]
1. There is the old shotgun clause: One party names a price and the other party(s) either buys it for that price or sells their share to the exiting party for that price! (I tried this one with a joint timeshare with my ex as it was a pain when it came time to collect her maintenance fees. I had purchased a 2nd week and was hoping that she would buy out my half and then we each would have our own annual week in our own names. I told her to make an offer and i would sell my half or buy out her half if i felt the offer was too low - she just said to leave things as they were... sheeeshh...
2. Another idea is to let someone new take over the terms of the contract so long as the other 2 parties agree to who it is.
3. is to sell off the property and dissolve the contract.
Here are a few links on JV agreements....
http://www.lawdepot.com/contracts/joint-venture-agreement/index.php?loc=CA&a=t
Here is a JV checklist... (Sask) http://www.canadabusiness.ca/servlet/ContentServer?cid=1083346949765&lang=en&pagename=CBSC_SK%2Fdisplay&c=GuideFactSheet
Dean
[email protected]