Equity Partnerships and how it works

An equity partnership is a joint venture between individuals that have come together to pool their capital and possibly skills to obtain revenue and growth from their investment.

Generally one of the partners is employed as a farm manager. The farm manager can also be a sharefarmer.

Equity partnerships can provide opportunities to individuals to fast track their career opportunities beyond that which could be achieved on their own, or at least increase the speed with which this might happen.

In general the following takes place...

  • A company is set up with standard farming company constitution
  • All assets (land, stock, plant) owned by the company
  • Shareholding based on the amount of share capital that individuals contribute to the set up
  • Purchase of assets funded by shareholders capital and bank debt borrowed by the company
  • Shareholders capital contribution may come from that individuals own cash or from borrowing against their own assets
  • A Shareholder Agreement is signed by and binding on all shareholders. This sets out how the joint venture will operate