{"id":55461,"date":"2018-10-31t12:00:36","date_gmt":"2018-10-31t16:00:36","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=55461"},"modified":"2018-11-01t17:18:32","modified_gmt":"2018-11-01t21:18:32","slug":"12-basics-of-partner-agreements","status":"publish","type":"post","link":"\/\/www.g005e.com\/2018\/10\/31\/12-basics-of-partner-agreements\/","title":{"rendered":"12 basics of partner agreements"},"content":{"rendered":"

\"\"these are non-negotiable for new partners.<\/strong><\/p>\n

by marc rosenberg
\nthe rosenberg practice\u00a0management library<\/a><\/i><\/p>\n

when any business transaction takes place, both parties to the agreement must agree, preferably in writing, to the terms of the arrangement. bringing in a new partner is no exception.<\/p>\n

more:<\/b> 10 merger hiccups for partners<\/a> | 14 partner agreement issues in mergers<\/a> | partner duties, prohibitions and grounds for expulsion<\/a> | principals who aren\u2019t cpas<\/a> | why non-compete and non-solicitation covenants matter<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n

the document confirming this arrangement is the partner agreement. everyone has trepidations about signing a long document filled with legalese. the prospective new partner has probably never seen such a document before and is certainly not familiar with its standard provisions.
\n
\nthe following areas of typical partner agreements are considered non-negotiable by the firm:<\/p>\n

    \n
  1. a buy-in that may not relate to the new partner\u2019s share of the firm\u2019s ownership or the firm\u2019s value. it\u2019s merely dues to get into the club.<\/li>\n
  2. non-compete and non-solicitation covenants.<\/li>\n
  3. commitment to an obligation to buy out older partners, whether you think they deserve it or not.<\/li>\n
  4. capital cannot be withdrawn until termination.<\/li>\n
  5. a partner’s capital account may eventually grow well in excess of the initial capital contribution, but not even a small percentage of it can be withdrawn for personal needs, even temporarily.<\/li>\n
  6. the firm is likely to have a model of firm governance stated in the partner agreement. every partner, including new partners, must agree to comply with this model.<\/li>\n<\/ol>\n

    a new partner may not have much say in most day-to-day decisions:<\/p>\n

    \u2013 the mp, executive committee and department heads will make most decisions.
    \n\u2013 partners do not have an inalienable right to be involved in all decisions.
    \n\u2013 there are few partner votes, period.<\/p>\n

      \n
    1. mandatory retirement.<\/li>\n
    2. the manner and terms of partners working part-time after retirement is at the firm\u2019s sole discretion.<\/li>\n
    3. partners are accountable to the firm\u2019s management for performance and behavior.<\/li>\n
    4. making personal investments in clients\u2019 businesses is subject to the firm\u2019s approval.<\/li>\n
    5. 100 percent of all partners\u2019 time must be devoted to the firm: no outside businesses, public office, etc., without firm approval.<\/li>\n
    6. total partner income will be determined in one of these ways:\n