Assignment of Partnership Interest
Transfer all or part of a partnership interest to a new owner with a clear written record of what was transferred, what was paid and whether the other partners consented.
Includes 30 days of edits
- 5 to 20 minutes
- Print-ready PDF
What is an Assignment of Partnership Interest?
An assignment of partnership interest is the document a partner (the assignor) signs to transfer some or all of their ownership in a partnership to another person or business (the assignee). It can be used for a sale, a gift or a transfer to a family member, a trust or a related company.
A partnership interest is more than a percentage. It usually combines economic rights, such as a share of profits, losses and distributions, with management rights, such as voting and the ability to act for the business. In most states, a partner can transfer the economic rights without the other partners' approval, but the person receiving them does not become a full partner unless the other partners consent or the partnership agreement allows it. This document lets you state which rights are being transferred.
The assignment identifies the partnership and the interest, records the price or other consideration, includes the assignor's promises about ownership, sets out whether the assignee is being admitted as a partner and agrees to be bound by the partnership agreement, and provides consent lines for the other partners and an optional notary acknowledgment.
When to use it
- A partner is selling their interest to an outside buyer or to another partner.
- A partner is giving part of their interest to a family member or transferring it into a trust.
- A business partner is moving its interest to an affiliated company.
- The partnership agreement requires a written assignment and partner consent for any transfer.
- You need a record of the transfer for the partnership's books and tax filings.
What is included
- Identification of the partnership, assignor and assignee
- Description of the interest transferred, in whole or in part
- Full partnership rights or economic rights only
- Purchase price, gift or other consideration and payment terms
- Assignor's representations about ownership and authority
- Assignee's agreement to be bound by the partnership agreement
- Allocation of profits, losses and tax items in the year of transfer
- Consent of the other partners, where required
- Governing law, indemnification and general provisions
- Signature blocks and optional notary acknowledgment
How to make your Assignment of Partnership Interest
Answer the questions
Tell us about the parties and the terms you want. Most documents take about 5 to 20 minutes.
Review the preview
Check the draft as you go and change any answer. The document updates instantly.
Download, sign and keep a copy
Download a print-ready PDF, sign it with the other parties, and give everyone a copy.
Frequently asked questions
What does assigning a partnership interest mean?
It means transferring some or all of a partner's ownership in the partnership to someone else. The assignment can cover the right to share in profits and distributions, and, if the other partners agree, the right to become a partner with full management and voting rights.
Do the other partners need to consent?
Often, yes. Many partnership agreements restrict transfers or require the approval of all or a majority of the partners. Even where an assignment of economic rights is allowed without consent, state partnership law generally requires the other partners' consent for the assignee to be admitted as a full partner. This document includes consent lines for that reason.
What is the difference between a full assignment and an economic-only assignment?
In a full assignment, the assignee steps into the assignor's shoes and, with the necessary consent, becomes a partner. In an economic-only assignment, the assignee receives the right to profits, losses and distributions but does not gain voting or management rights or become a partner.
Does the assignor stay liable after the transfer?
Usually, an assignor remains responsible to creditors for partnership obligations that arose while they were a partner. Whether the assignor is released from future obligations depends on the partnership agreement, the other partners' agreement and state law.
Can I assign only part of my interest?
Yes. You can assign a stated percentage of the total partnership interests, and you keep the rest of your interest. The document records both the transferred percentage and your remaining percentage.
Are there tax consequences to assigning a partnership interest?
Often. A sale or gift of a partnership interest can trigger income tax, gift tax reporting or changes to the partnership's tax filings. Many people speak with an accountant before signing.
Should an assignment of partnership interest be notarized?
Notarization is generally not required for the assignment to be valid, but it provides extra proof that the assignor signed. Some partnership agreements or lenders require it, so you can add a notary acknowledgment.
Is this the same as a partnership withdrawal agreement?
Not quite. An assignment transfers an interest to a specific person. A withdrawal agreement documents a partner leaving the partnership, usually with the partnership or the remaining partners buying out the interest, along with releases and exit terms.
