{"id":45290,"date":"2015-10-27t05:00:04","date_gmt":"2015-10-27t09:00:04","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=45290"},"modified":"2024-08-14t11:28:26","modified_gmt":"2024-08-14t15:28:26","slug":"pitfalls-equity-allocation-reallocation","status":"publish","type":"post","link":"\/\/www.g005e.com\/2015\/10\/27\/pitfalls-equity-allocation-reallocation\/","title":{"rendered":"when two partners isn’t enough and three is too many"},"content":{"rendered":"

\"statue<\/a><\/strong><\/p>\n

the pitfalls of equity allocation and reallocation.<\/strong><\/p>\n

by <\/span><\/i>bill reeb<\/span><\/i> and <\/span><\/i>dominic cingoranelli<\/span><\/i><\/p>\n

i want to address the issue of equity \u2013 how it is commonly allocated to begin with, and then making adjustments to it over time.<\/p>\n

for many firms, the idea in the beginning is that \u201call the partners are the same, so their ownership should be the same.\u201d when the firm starts out with only a shingle, this is a very fair premise. so, for the sake of this column, let\u2019s start out with a two-partner firm and build from there, talking through the common issues that arise in the area of distributing equity ownership.<\/p>\n

more on performance management:<\/b> develop your employees or suffer the consequences<\/span><\/a> | <\/span>cpa firm performance assessments: 15 core competencies, 21 questions<\/span><\/a> | <\/span>how to target what skills to develop now<\/span><\/a> | <\/span>what having your employees\u2019 backs means<\/span><\/a> | <\/span>5 harmful management attitudes (and how to fix them)<\/span><\/a> | <\/span>do cpa firms need management or leadership?<\/span><\/a> | <\/span>job 1 for the practice owner: client management<\/a><\/span><\/p><\/blockquote>\n

start with two<\/strong><\/p>\n

the most common approach would be for the two partners to split the ownership 50\/50. the reason why this often works so well is because the two people who\u00a0join together often are brought together because of their complementary skills. for example one might be very technically competent and the other more marketing savvy. together they make a great team \u2013 one, without the other, is less effective.<\/p>\n

read more →<\/a><\/p>\n