New Partner Purchases from Existing Partner
One partner selling his or her interest to a new party may often only be done with the agreement of the other partners. Otherwise, the other partners could invoke their right of first refusal, providing there was such a provision in the partnership agreement. If there was not such a provision or the partners did not want the new person but could not afford to purchase the share, there will simply be an agreement between the buyer and seller, outlining the terms of the sale. In such cases, the new partner is not entitled to full participation in the business. The original remaining partners will generally need only pay the purchaser his or her appropriate share of the profits.
When there is a purchase of one partner's interest, there will probably be two agreements: one between the buyer and seller and an amendment to the partnership agreement. The agreement between the buyer and seller will simply state the terms of the sale, such as a description of the seller's interest in the partnership, the purchase price, and how the purchase price is to be paid.