Shareholder Basics
A shareholder owns part of a company. Shareholders get some profits and can vote on company matters. They can be fired by controlling owners, even if they are on the board. A vote may be needed to remove a board member. Activist shareholders like Elliot Research can successfully get boards to change business plans. The CPA exam’s Regulation section covers shareholder duties and liabilities.
CPA Firms and Ownership
A CPA firm must be licensed in its state and be owned at least partly by CPAs. CPA firms offer services beyond taxes, like auditing and accounting. Common shareholders get voting rights, while preferred shareholders receive set dividends. To become a partner in a CPA firm usually means higher pay, but also harder performance goals. Partners share in the profits when the firm does well.
Non-CPA Ownership
The Uniform Accountancy Act allows non-CPA owners of CPA firms, but a CPA must still be the primary owner. CPA groups and state boards permit part ownership of CPA firms by non-CPAs, which means enrolled agents can own part of a CPA firm, but a licensed CPA must be the majority shareholder. Some are concerned that non-CPA ownership could lead to a push for higher profits over proper audits.
Becoming a Partner
The Role and Rewards of Partnership
Becoming a partner in a CPA firm means taking on ownership and sharing in both the rewards and challenges. Partners are expected to participate in business development and bring in new business, which can be a challenge for those unfamiliar with this aspect. Resources are available online and from senior partners to help. As a partner, the firm’s future becomes a shared responsibility to clients, co-workers, and other partners.
Financial Aspects of Partnership
Partners can delegate complex tasks and are typically recruited at market wages. Equity partners’ average compensation rose from $1.24 million to $1.39 million, whereas non-equity partners saw an increase from $388,000 to $432,000. Two-thirds of U.S. CPAs are satisfied with their pay, with over four-fifths expecting more within a year.
CPA Affiliate Marketing
CPA affiliate marketing involves earning commissions for referrals, like reviewing dog foods with Amazon links and getting commissions for purchases made through those links. Quality products are promoted to earn these commissions.