With 18 key clauses and 24 essential ingredients.
By Marc Rosenberg
CPA Firm Management & Governance
A partnership agreement contains clearly defined terms and conditions of the firm including, but not limited to, each partners’ responsibilities, their pay and their roles within the business. It also includes rules and regulations that are to be followed by the partners in the business. It is essential for a CPA firm to have a partnership agreement, regardless of how collegial and friendly the partners are with each other.
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A partnership agreement can prevent potential future disagreements that could occur pertaining to the objectives and responsibilities of the firm.
A number of years ago, I was engaged by the managing partner of a firm to draft their first-ever partnership agreement. The firm had three partners: the 57 year old founder, who was a dominant, rainmaking managing partner, and two other younger partners who performed at a much lower level than the founder.