Practice Continuation Agreements: A Practice Survival Kit, Second Edition [Download]

• Preface
• Acknowledgments
• Chapter 1:
  • Why  Every Sole Practitioner and Small Firm Needs a Practice Continuation Agreement Needs a Practice Continuation Agreement
  • A Tale of Two Practitioners
  • Foresight and Planning
• Chapter 2:
  • Types of Practice Continuation Agreements
  • One-on-One Agreements
  • Group Agreements
  • State Society Plans
• Chapter 3:
  • Basic Preparations
  • Practice Analysis
  • Client Information
• Chapter 4:
  • Placing a Value on Your Practice
  • Valuation Overview
  • Valuation of Tangible Assets
  • Fixed Assets
  • Accounts Receivable
  • Work in Process
  • Valuation of Intangible Assets
  • Valuation Methods
  • Valuation Allocation
• Chapter 5:
  • Identifying a Potential Successor
  • Where to Look
  • Whom to Choose
  • An Experienced Practitioner
  • Your Professional Staff
  • Former Employers
  • Special Problems
  • What to Look For
• Chapter 6:
  • Constructing the Agreement
  • Definitions
  • Assumption of a Practice on a Temporary Basis
  • Assignment of Staff and Other Employees
  • Compensation Arrangement with the Successor
  • Assumption of a Practice on a Permanent Basis
  • List of Clients
  • Working Papers
  • Files
  • Books and Financial Statements
  • Work in Process and Accounts Receivable
  • Equipment and Supplies
  • Existing Leases
  • Employee Records
  • Liabilities and Malpractice Insurance
  • Property and Casualty Insurance
  • Fees and Billing Information
  • Payment for the Practice
  • General Provisions
  • Noncompetition Clause
  • Termination of the Agreement
  • Arbitration
  • Notification
  • Negotiation Considerations
  • Carryover Expenses
  • Firm Name
  • Financial Protection
  • Telephone, Box Numbers, and E-Mail
• Chapter 7:
  • Payment Methods
  • Group Payment Method
  • Client List Method
• Chapter 8:
  • Once the Plan Is Complete
  • Notifications
  • The Transfer of the Practice
• Chapter 9:
  • The Surviving Spouse
  • What to Do First
  • Whom to Contact
  • What is Important
  • Conclusion
• Appendix A
  • Sample Action Plan
• Appendix B
  • Sample Firm
• Appendix C:
  • Sample Practice Continuation Agreements
  • Exhibit 1: Practice Continuation Agreement
  • Exhibit 2: Group Practice Continuation Agreement
• Appendix D
  • Sample Communications
  • Exhibit 1: Letter from Attorney to Clients
  • Exhibit 2: Letter of Instructions to Spouse (or Survivor)
  • Exhibit 3: Letter to Attorney
  • Exhibit 4: Instructions for Key Staff Member
  • Exhibit 5: Letter to Clients in the Event of Disability
• Appendix E
  • Sample Agreements to Buy and Sell
  • Exhibit 1: Agreement to Buy and Sell
  • Exhibit 2: Agreement to Buy and Sell Client List Only
  • About the Author

090211PDF

Ask yourself the following question: What will my spouse or immediate heirs do with my practice if I die or become disabled? Stop and think a minute.

What would they do? Would your spouse or children be able to take over the management of your practice? Odds are that they would not. What, then, would become of all your hard work and effort with your practice and clients? How can you preserve the value of your professional accounting practice, which may be the largest asset in your estate?

This book explains how you can ensure the continuity of your practice with a practice continuation agreement. In the event of death or temporary or permanent disability, a practice continuation agreement helps protect your practice and hence the business interests of your clients and the financial interests of you and your family. It can also be used as a vehicle for retirement.

A practice continuation agreement is a contract that provides for the assumption of your practice by another CPA firm or individual under a predetermined plan for payment based on its value. In the event of death or permanent disability, your practice will be transferred to another firm or individual. In the event of a short-term disability, your clients will be temporarily serviced by the same CPA firm or individual at a predetermined fee structure.

Preparing a practice continuation agreement requires time and effort, but it is well worth the investment. Because of the significant impact it can have on his or her estate, a practice continuation agreement should be part of every sole practitioner's personal financial plan. Moreover, it can provide important benefits to a twopractitioner partnership by providing relief in the event of a mutual disaster. Ideally, a practice continuation agreement should be drawn up when you establish your practice. An unexpected event can occur at any time, and you may not have an opportunity to put your affairs in order. In other words, do it now!

A practice continuation agreement is a practice's survival kit.