Partnership buy-in agreement, also known as buy-sell, is a contract between the partners in a business detailing what happens to the ownership equity after a partner exits the company.

How is partnership buy-in calculated?

Structure Your Buy-In

Your buy-in price will be a percentage of the total value, usually divided equally among all of the partners. Thus, if there are already four partners, you would be the fifth partner, and the total practice value would be divided by 5 to determine your buy-in amount.

How does a partner buy-in?

The amount of the new partner buy-in has changed significantly over the years at CPA firms. Years ago, the buy-in was determined by first, totaling the value of the firm (accrual basis capital PLUS the goodwill value of the firm) and then, multiplying it by the ownership percentage awarded to the new partner.