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| Author: | Weinstein, S. |
| Title: | Add a New Ownership to Your Firm |
| Journal: | Journal of Accountancy
2003 : AUG, VOL. 196:2, p. 43-48 |
| Index terms: | ACCOUNTING COMPANIES FINANCIAL ANALYSIS SHARES |
| Language: | eng |
| Abstract: | Many owners of CPA firms know their future retirement likely will be funded by enlarging the ownership pool. For young CPAs who can't afford to purchase a partnership interest, some firms create an interim level that avoids the ownership-affordability problem by promoting an individual to "nonequity" (income) owner. A nonequity owner shares in the firm's income but doesn't own a share of the firm's accrual-basis capital (ABC) and may not get full access to all its financial information, a vote on all firm issues or other entitlements. The arrangement provides both parties a period of time in which to size each other up and work out future terms. Pressing equity-owner questions include whether a new partner should buy in and how owner/partners should determine the price. |
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