Partnership Agreements

By CPABC
Last Revision: 8/31/2016

If you are practising within a partnership and don’t already have a signed partnership agreement, you should get one in place as soon as possible. The agreement should address not only admission but also departure of partners, and include provisions for the sudden death or disability of a partner. If you already have an agreement in place, review it on a regular basis to make sure the terms are still appropriate for your current circumstances.

On occasion, partnerships break up or senior staff members leave to open their own practices. Not surprisingly, clients follow the partner or staff who were their main contact and provided the most direct service. CPABC strongly urges firms to prepare and execute formal partnership and employment agreements at the outset to protect each party and avoid acrimony in the event the professional relationship ends.

Partnerships and employment relationships are governed by contracts and related case law, not by the CPA Code of Professional Conduct. In fact, there’s little in the rules or bylaws that would allow CPABC to interfere with such private arrangements. If you are an employee, it’s in your interest to have a clear and written understanding as to what happens to the clients you bring into the firm should you terminate your employment. If you are a partner, you need to protect the practice you are building up. Put everything in writing and speak with a lawyer.