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Adopting an amendment


Chippy

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A law firm recently amended their plan to allow for retired partners to participate in the plan. They had an attorney draw up the amendment but they did not prepare a Formal Record of Action of the Partners (Partnership) or a SMM. I told them they needed both and prepared the forms for them. They do not want to sign the Formal Record of Action of the Partners nor distribute the SMM.

Can they adopt the amendment without signing the Formal Record of Action of the Partners? I've never prepared an amendment with out it or a Corporate Resolution.

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Leaving aside questions about what summary of a plan is necessary, prudent, or wise, what does the plan's document say about what act the plan's sponsor must do to amend the plan?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Also (a) what type of plan are you talking about, and (b) what is meant by "allow for retired partners to participate"? Depending upon the answers your concern may be small potatos compared to other issues.

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IANAL, but a lawyer might take the position that a partnership does not need a formal record of action - signatures of all partners on a document are sufficient to indicate that they approve and adopt the action. Did the amendment have all such signatures?

It sure makes things clearer if they just go along.

Ed Snyder

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This is a Volume Submitter plan document. The company has two plans, one for Senior partners, junior partners, and staff and one for associate attorneys and contract attorneys. They are amending the one for Senior partners to include senior contract partners. ( a former partner that no longer holds any ownership or voting interest)

They had an attorney do the amendment, and it only has room for one signature. Would the amendment suffice if all the partners signed it?

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What does the plan say about amendment? It is probably something unhelpful like "the Employer may amend ... " if so, then it is a matter of "corporate" governance concerning the requirements and formalities for the Employer to act in the matter. Those formalities will be determined by such things as the partnership agreement, at which point you are probably getting very close to "it is none of your damn business" and you probably need to rely on the lawyers to know their own governance rules. Or prove you know better. Or have a well-drafted plan document that specifies (ha!). Instead of pursuing the issue and getting a black eye one way or another, disclaim responsibility and get acknowledgement.

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