Think of this a little bit like a common-law marriage. There is a belief that if you’re with someone for long enough you automatically gain certain rights whereas, in reality, if things hit the skids you can shout all you like about who gets to keep the three piece suite, but unless your name is on the credit agreement you’re going to have to make do with beanbags for a while.
Quasi-partnerships are better than common-law marriages. Many companies are set up in the beginning a bit like common-law marriages. The shareholders form a company and without the song and dance of a big wedding they quietly ‘move in together’. There is an understanding that they are equal partners; that they will each get a say in decorating the office; both have access to the bank account and a choice over the brand of tea in the boardroom. When a company has developed like this lawyers often call it a ‘quasi-partnership’.
Quasi-partnership rights protect the vulnerable, turning a common-law marriage into the real deal. Even if the ownership of the company is unequal, quasi-partnership rights can prevent you being turfed out onto the street. Quasi-partnership rights can be excluded from a Shareholder Agreement, for example, using a clause stating that ‘the parties are not in partnership with each other’, but you must be clear. This can makes life simpler and less costly should you ever find yourself facing a corporate divorce.