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Opposing Views on Mandatory Retirement

Marc Rosenberg, CPA / March 23, 2020

Two-thirds of partner agreements include a mandatory retirement provision.  This provision usually requires partners to give up their equity but allows them to continue working in some fashion.  A common stipulation is that if a “retired” partner wishes to continue working, either full or part-time, this must be approved annually by the other partners. Here…

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Getting Sick and Tired of Ownership Percentage Driving Your Partner Decisions?

Marc Rosenberg, CPA / May 21, 2019

I sure am. Why? Imagine you entered into an ownership position in a CPA firm in your mid-30s.  Over the next 30 years or so, you’ll be paid your share of millions of dollars. Do you want your share to be based on judgments that are rational and logical, or unfair and lacking in common…

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Is Your Partner Agreement Deficient? 16 Must-Have Provisions

Marc Rosenberg, CPA / June 11, 2018

Properly written partner agreements contain more than 200 provisions, all important. We have reviewed hundreds of partner agreements and helped firms create or revise several dozen, and based on this experience, I’ve identified what I consider the 16 most critical provisions in CPA firm partner agreements.  The items are not listed in order of importance. …

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Establishing an Executive Committee

Marc Rosenberg, CPA / August 17, 2015

Questions from a Reader: Our firm is currently working on revising our shareholder agreement. We have 13 shareholders. We are wrestling with a few issues. We plan to create an Executive Committee to work with our MP.  What is the best way to seat the EC? Elected by the partners or appointed by the MP?…

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Should Retired Partners Be Allowed to Work For Another Firm?

Marc Rosenberg, CPA / October 20, 2014

When partners retire and begin receiving deferred compensation payments, should they be allowed to work at another accounting firm? Most firms’ partnership agreements stipulate that a retired partner’s joining another firm automatically triggers a loss of all deferred comp payments – even if clients are not taken. Firms invest a great deal of time and…

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CPA Partner Agreement Issues – Part 2

Marc Rosenberg, CPA / September 11, 2012

We recently invited attorney Russell Shapiro, partner with the law firm of Levenfeld Pearlstein, to speak to our roundtable group of 20 of the largest 30 CPA firms in Chicago on CPA partner agreements. In our blog post of August 29, 2012, we listed four key items he identified that are rarely addressed. Here are four more.

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CPA Partner Agreements: Cutting Edge Issues

Marc Rosenberg, CPA / August 29, 2012

At a recent meeting of my monthly roundtable of 20 of the 30 largest local CPA firms in Chicago, we invited attorney Russell Shapiro, partner with the law firm of Levenfeld Pearlstein, to speak to us about key issues which are rarely addressed in CPA firm agreements. The first four items are listed below; the last four will appear in a future blog post.

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Partner Agreements: Rules on Goodwill-Based Provisions

Marc Rosenberg, CPA / May 22, 2012

The 2011 Rosenberg Survey showed that 23% of CPA firms had no provision in their partnership agreements for goodwill based retirement payments (also called deferred comp payments) to departing partners.

If these firms think that being silent on this subject means they do not have to make these payments, they should think twice.

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Equity vs. Non-equity partners

Marc Rosenberg, CPA / April 24, 2012

In a CPA firm, the equity partners are the “drivers.” They bring in business, keep clients because of great service, lead others and develop staff into leaders. They “drive” the firm’s revenues and profits.

But to be successful firms need a second type of partner – those who have the skill and personality to play a leadership role in servicing and retaining clients, but haven’t yet attained the “driver” level. Many firms call these important players non-equity partners.

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CPA Firm Partner Agreements – Top 10 Weaknesses

Marc Rosenberg, CPA / February 28, 2012

Thousands of CPA firm partner agreements haven’t been updated for 20, 30 years or more.  At some firms, this oversight is due to a lack of time.  At other firms, the issues neglected are somewhat sensitive so the partners avoid addressing them.  At most firms, it’s a little of both.  Here are 10 partner agreement…

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