The importance of partnership agreements.
Journal of Accountancy › Vol. 177 Nbr. 1, January 1994
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Summary
CPA partnerships
Partnership agreements, including those used by CPA firms, should address financial, managerial and structural issues and changes, and such agreements should be updated periodically. Arrangements typically provide for the capital contributions and profit-sharing of the partners, but clauses dealing with the death, disability, retirement, or termination must also be included. Partners should also consider noncompetition clauses and clarifications of the partnership's business purpose.See the full content of this document
Extract
The importance of partnership agreements.
Every successful CPA firm should have policies for addressing major practice issues.
The preparation and periodic review of a CPA firm's partnership agreement is critical to practice success. A properly drafted and comprehensive agreement that is updated regularly can prevent or minimize many problems that otherwise might arise as the practice develops. Because a partnership is intimately involved with the partners' personalities, no two partnerships are exactly the same. Thus, no model partnership agreement can cover the many concerns, goals and management styles and practices of every accounting practice. Nevertheless, all partnership agreements should address certain matters. STATEMENT OF PURPOSES Although the statement of purposes may seem to be a rather straightforward provision, it is important the agreement set forth the specific businesses in which the partnership...See the full content of this document
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