Partnership Agreements: Legal Issues to Consider
Source: The Marc Rosenberg Blog
The following includes excerpts, reproduced with permission, from a blog post by Marc Rosenberg.
At a recent meeting of my monthly roundtable, we invited attorney Russell Shapiro, partner with the law firm of Levenfeld Pearlstein, to speak about key issues rarely addressed in CPA firm agreements. The first four are listed below:
- If a firm's partnership agreement is silent on paying deferred compensation to retired or otherwise terminated partners, do these partners have a legal claim to receive deferred compensation payments nonetheless? The answer is usually yes, which will surprise a lot of people.
- Can firms impose damages in excess of one times fees for violation of nonsolicitation agreements? Usually, yes.
- Are nonsolicitation agreements for staff enforceable? Courts in some states will enforce a properly written nonsolicitation agreement, while courts in other states will not.
- If the partners vote to reduce partner retirement benefits, is this enforceable in a court of law? Quite possibly, no. Courts frown on amendments that (a) single out one partner or (b) reduce retirement benefits for all partners, unless a majority of those near retirement age agree.
Two important caveats: (1) Several of these issues are governed by state laws, which vary considerably from state to state and (2) the term “partnership agreement” is applicable to all legal entities.
For the original post, read “CPA Partnership Agreements: Cutting Edge Issues.”
From The Marc Rosenberg Blog, August 29, 2012, http://blog.rosenbergassoc.com.