Oil Gas Pre-Incorporation Agreement

The launch of a new business in the oil and gas sector will be driven in large part by the legal agreements that the parties enter into that will direct this new business venture, such that it is extremely important that these contractual arrangements need to be clearly defined and established. Such a contract needs to be appropriately negotiated and drafted such that each side is properly protected and capable of realize the most from this new business venture (while having the capacity to resolve problems and settle disputes).

What should be noted is that pre-incorporation partnership agreements need to be particularized to the circumstances, given the unique aspects of each contractual relationship. Particular aspects seen in such contracts have included:

"Purpose. The Partners hereby agree jointly create and form a Partnership in accordance with and subject to the Partnership Act and the Agreement with a view of converting it into Business Corporation upon occurrence of the Event."

"Pre-Incorporation Contracts. Any contract entered into by a Partner or several Partners in the name of the Partnership and in the best interests of the Business Corporation shall contain a clause stipulating that, following the incorporation of the Business Corporation: (a) the Business Corporation shall be subrogated in the rights and obligations of the Partnership by way of novation; (b) the Partnership shall be released from any liability with respect to the contract so entered into; and that, in the event that the Business Corporation should not be incorporated, the Partnership shall incur no liability as a result thereof."

"Participation in the Losses. The Partners agree that, if the Partnership suffers a loss during the time preceding the incorporation of the Business Corporation and if the assets of the Partnership, at any time, are insufficient to meet its obligations, each of the Partners shall contribute, in proportion to the value of his Shares in the Partnership, to the absorption of the loss or to the payment of its obligations."

For more information on the legal services of Neufeld Legal P.C. with respect to launching your new business in the oil & gas sector (from incorporation onwards) or to schedule an appointment, contact our lead lawyer Christopher Neufeld at Christopher@OilGasLawyer.ca or 403-400-4092.

* * * * *

Agreements pertaining to the launch of an oil and gas business start-up.

Unanimous Shareholder Agreement

Joint Venture Agreement

General Partnership Agreement

Pre-Incorporation Partnership Agreement

Joint Ownership and Management Agreement