How do you arrange Partnership Agreements?
I've obtained a client who has no Partnership agreement in place. As a tax avoidance measure, with some good commercial reasoning to boot, it has been proposed to admit several long-term employees into Partnership.
The current Partnership has no agreement. The intention is to have a two tiered system whereby the current Partners are "Senior" and entitled to a higher profit share than the new "Standard" Partners. It is also intended to have allotted "Salary" rates for each Partner based on hours work with residual profits in a profit share arrangement.
The Senior Partners have power to vote (jointly) to remove any Standard Partner.
My first suggestion was to use a law firm so as to absolve us of responsibility.
I guess I have two questions:
- Does anyone else generate Partnership agreements in-house without a qualified Solicitor?
- What would be your expectation of costs to implement the above agreement using a Solicitor?
I have no issue drafting it personally. However my only concerns are whether I can provide "due care and attention" without the legal basis and what our insurers may think!
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