I am currently a sole practitioner organized as an S-Corp, providing tax and bookkeeping services.  This summer I plan to team up with a former co-worker of mine to expand my practice and allow some additional flexibility.  Both of us wish to concentrate on providing bookkeeping services to small businesses, working about 30 hours a week.

I currently have about 100 tax clients (mostly individuals), and about 8 regular bookkeeping clients.  I am having a baby, and am due in August, which is the main reason behind forming this partnership.  I'd like to have my future partner cover my bookkeeping clients for about 3 months while I'm on maternity leave.  This will give her some experience working with QuickBooks and getting familiar with bookkeeping (she's been in auditing for 7 years).  And it will also allow me to take time off, knowing that my clients are taken care of.

However, beyond that, we're not sure where to go.  We think that we want to form a new practice with us as partners.  But, how should we organize that practice, divide the profits, etc.?  I pretty much have my clients already set, a schedule that I'm happy with, and monthly income that I'm comfortable with.  So, what is the best way to incorporate a new partner to my business?  Any advice would be greatly appreciated!

I agree with Meganzay.  Be very cautious about entering into a partnership so quickly.  It sounds like your potential partner has very little experience with this type of work, and it would benefit both of you to test the waters before forming a partnership.  Bookkeeping and tax services are very different than auditing.

The only way I would bring in a partner this way would be if they were bringing in their own book of business and/or capital to contribute to a marketing campaign to build up the business so that it can easily support both of you.

There are many ways you could continue to support your clients during your maternity leave.  It would be tough, no doubt, for the first few months, but you could bring in someone part time to do the data entry, and review his or her work while the baby is sleeping.  And yes, I do know this--I have four kids five years apart, and started working for myself when my kids were babies.

You could easily service your clients remotely--I wish I had access to today's technology 15 years ago!

Don't make a hasty decision on this one.  A partnership can be even more challenging than a marriage--remember, your partner doesn't have to love you!