At present, the landscape is quite fragmented. Most of the firms are either proprietorship or small partnership firms. Such firms are hardly considered when it comes to giving a big assignment or where expert knowledge of a particular domain is required. Therefore, it is imperative that we forgo our individual identity, come under a common banner and develop specialisation in various verticals.
Broad contours of the proposed LLP are as under:
The proposed firm will have a name which would be a combination of the names of the members who join the firm at the initial stage. However, the incoming Partners would appreciate that beyond a point accommodating name of every individual in the firm name will not be possible. Please do note that the name of the firm will not at any stage be after any individual’s name or otherwise reflective of legacy of a group of individuals.
The firm will belong to all the partners and none of the Partners or the Governing Board will have a right to expel or force a partner to go on retirement except under the exceptional circumstances where his/her continuation with the firm will cause serious damage to the reputation of the firm or survival of the firm or any other appropriate reason warranting such an extreme step. Any decision in this regard will be taken by the Governing Board only which will be binding on the concerned Partner.
A governing Board will comprise of a minimum 5 partners. Number of the members on the Board will be increased over the period as the majority of the members / Governing Body deems fit. The tenure of these members will be of three years. Every year 1/3 or near to, of the members who have been with the Board for the longest period, will retire and new ones will come on Board. All the retiring members will be entitled to offer themselves for reappointment. Voting will done by all the partners only and every Partner will have equal vote.
The Governing Board will be the apex body to run the firm and take decisions on the common issues. The Governing Board will have powers to make the changes in the partnership terms in consultation with the Partners to ensure smooth running of the firm.
4. The Governing Model:
All the Partners will have liberty to continue to operate as they have been. He could open and operate a bank account in the name of the firm. Further, he could meet the expense out of the bank account to the extent of his / her share due and payable. Whatever business is brought in and executed exclusively by a Partner – full fee net of taxes and attributable expenses out of the common pool, will belong to him.
However, on joining the firm, he will have to merge his firm with the proposed LLP.
The Partners to be taken on Board will have requisite qualification / experience or credentials in one of the proposed verticals namely Auditing, Ind AS, ECB, PE, Domestic Funding, Wealth Management, International Taxation, Transfer Pricing, GST, EXIM, SEBI, FEMA, PMLA, Companies Act, Succession Planning or any other promising field.
Limited number of Partners will be taken to deal in a specific vertical for a particular location. The work coming to the firm will be referred to the concerned domain expert partner keeping in view relevant factors. The Governing Board will do the work allocation.
5. Profit sharing:
a. Referral fee – 20% of the *net fee shall be paid to the Partner who brings in business unless a higher percentage is agreed by the Governing Board for the reasons to be shared with the Board. In case, the Board agrees for higher percentage, the difference will be made up from the Common Pool fee. The concerned partner shall be entitled for the referral fee at 20% or such higher amount as agreed by the Governing Board so long as the work remains with the firm.
The work coming purely on the strength of the firm will not be subject to referral fee.
However, where a client is introduced to the firm for a particular work, the concerned Partner shall be entitled to the referral fee in respect of the work which was originally brought in by him. Any work subsequently given by the client to the firm will not entitle the Partner for additional referral fee.
b. Execution fee – 50% of the *net fee where referral fee is required to be paid, otherwise 60% of the *net fee shall be shared in the manner given below:
c. Common Pool
30% of the *net fee where referral fee is required to be paid otherwise 40% of the *net fee will be earmarked to meet Income Tax, GST payments, common expenses etc.
The balance amount to be distributed amongst the Partners in the following manner:
* Net fee – Gross minus GST and other applicable tax.
The underlying idea is to see the firm growing over a period. Hence, as many partners will be inducted as the Governing Board deems fit.
The Office is at 906, I-Thum Business Park, Opp. Electronic City – Metro Station, Sec.62 – Noida- 201301. The office is located in a prime location. There are around 500 offices and number of MEME units in the neighbourhood. The office equipped with all the required facilities.