How the firm is held.
WHAT STRUCTURES TYPICALLY EXIST
Sole practice Partnership Limited liability arrangements, where permitted Incorporated practice, where permitted
WHAT TO ESTABLISH
What your profession permits.
WHY IT VARIES
Some professions restrict ownership to qualified persons and restrict structures.
WHAT PARTNERSHIP MEANS
Shared ownership, shared profits, and shared liability.
WHAT TO AGREE IN WRITING
Capital contributed Profit sharing Decision making and voting Roles and expectations Drawings Admission of new partners What happens on departure, retirement, incapacity or death How the firm is valued Restrictions after departure Dispute resolution
WHY DEPARTURE PROVISIONS MATTER MOST
They are the commonest cause of destructive disputes.
WHAT TO ADDRESS
Whether a departing partner may take clients Notice required Payment for their interest, and over what period
WHY PAYMENT TERMS
Immediate payout can be beyond the firm's capacity.
WHAT TO ESTABLISH ABOUT LIABILITY
What each owner is exposed to.
WHY
In some structures, partners are liable for each other's acts.
WHAT TO ESTABLISH ABOUT DECISION MAKING
What requires unanimity and what does not.
WHY
Requiring unanimity for everything paralyses the firm.
WHAT TO REVIEW
The agreement, as the firm changes.
WHAT TO HAVE
It drafted by a solicitor familiar with professional practices.
