Stallion syndication was very popular in the past, and today there are various reasons to syndicate a horse aside from breeding. Syndication refers to a co-ownership of a horse, also known as a “co-ownership agreement” when made between two or more people. Each owner owns a fractional interest in the animal and the original owner is the syndicator and the manager. Each person involved in the ownership has separate accounts, separate tax reporting, and separate benefits.
During the 1980’s, many people syndicated high quality stallions as investment and tax strategies. Stallion syndication was thought to have the advantage of spreading risks of loss and sharing maintenance costs, as well as attracting investors to situations that could generate significant profits for all parties involved. Whether you’re syndicating a horse for pleasure or business purposes, it is important contact an Orange County horse lawyer to draw up an agreement. Before visiting an equine attorney, ask yourself the following questions:
- Is the purpose of our collaboration pleasure or business? Do we all have a common goal?
- What is the duration of this agreement?
- Who makes the decisions about training and shows: is it one of the owners, or all of the owners? Are some of the owners silent partners?
- What circumstances would because for changing the agreement?
- What is our exit strategy from this agreement?
- What happens if the horse is injured or dies?
- What happens if one of the owners can’t pay the expenses or wants out of the agreement?
- How are disagreements between the owners to be resolved?
- What will trigger the sale of the horse?
- Anything else important to the owners?
This agreement will offer answers to any “what if” questions to avoid any disputes later on. Catanese & Wells is an experienced Orange County horse lawyer, specializing in a variety of equine legal aspects. Contact us today at 818-707-0407.