How We Started – Part 2 (Our Partnership Agreement)

By Lee Consavage


In March, April, May and June 2005, we met on a regular basis to work out the details of our partnership. We had to decide how to register our company – either as a corporation or as a Limited Liability Corporation (LLC). As we read through all the requirements necessary to create and operate a business, it was obvious to us that we should establish a Multi-Member Partnership LLC. This type of structure was simple to establish and allowed us to have 7 equal partners. Once we decided on the LLC structure, we now needed a name for the new company.


It soon became apparent that all of us shared a passion in learning about and designing renewable energy systems. We decided we wanted our new company to focus on that passion and needed a name to reflect our interest. In July 2005 we registered Better Earth Engineering Consulting Engineers, LLC, with the State of Maine. To establish a LLC in Maine requires completing the 2-page MLLC-6 form and mailing a check to Maine for $175. We also acquired a federal tax ID number, at no cost, by completing the “On-Line EIN Application” form at


The only other requirement needed to establish our LLC was to create a Partnership Agreement that detailed our arrangement. The Partnership Agreement is to be maintained in our office files and is not required to be filed with the state or federal government. We may also update the agreement as necessary.


The following are some excerpts from our Partnership Agreement. The fact that all of us were working full time at the Portsmouth Naval Shipyard while we were establishing our new company is also reflected in our agreement:


Goal - The goal of this firm is to: provide outstanding service to customers, to maintain high educational standards for each partner and employee, and above all, to provide energy efficient, state-of-the-art solutions to each energy related projects.


Introduction - This partnership agreement is a starting point, to provide basic structure in the formation of a new engineering consulting firm. As of this date we are comprised of 6 engineers and 1 Computer Aided Design expert, all considered equal partners (principals) in the firm. This number may change as necessary to benefit the goals of the firm. Also, the priorities of the firm may change over this time period, but as of this date, the intent of the firm is to provide mechanical, electrical, plumbing, fire protection and energy engineering design services, with an emphasis on incorporating energy efficient technologies and renewable energy systems into our designs. This agreement shall be reviewed and updated as necessary.


In The Beginning - Our duties at the Shipyard are varied; with overtime work and traveling requirements sometimes occurring without much notice. Therefore, to allow for our varied work schedules, the quickest way to get the new firm off the ground is to work as independent contractors, hiring each other to work on projects as needed. The benefit of being a partner in the new firm is to share office space, references, overhead costs, website, professional society membership, insurance, LLC, CAD operators, and the expertise of each engineer. Additionally, the partnership shall develop standard contract forms, specification standards, drawing standards, standard details, etc. The standard documents shall be updated as required.


Each partner may take advantage of his entrepreneurial spirit to seek/negotiate projects. The idea is to create a firm that encourages inventiveness and to foster an environment where each partner is satisfied with his position in the firm. As we gain experience working with each other, we’ll also come to a general consensus as to what each other’s strengths are – some leaning towards technical work, some leaning towards managing affairs of the firm and others being the face of the company – meeting clients on a regular basis. We’ve worked well together for many years and wish to continue working well together for many more years as partners in the new firm.


Leaving The Firm - It shall also for easy for each partner to leave the firm – whether for personal or professional reasons. Each partner is entitled to receive his initial capital investment (without interest) plus any profits for that year. A minimum one month’s notice is required. A partner leaving the firm is under no restrictions and may establish a similar firm anywhere. Of course the goal of this partnership is to ensure each partner is so satisfied with his position in the firm, both financially and professionally, that leaving the firm is only considered for personal reasons – i.e., retirement, moving, etc.


- End of Excerpts From Our Partnership Agreement -


It should be noted that all of the above was accomplished without the services of an accountant or a lawyer. We wanted to keep our expenses low and basically we enjoyed doing the research to determine what’s required to create a new company. We spent a lot of time reviewing our options and figuring which business structure best fit our goals. The requirements to establish ourselves very clear, and when we had questions, we made inquires with the state and federal government. We knew we would eventually need an accountant to complete the new company’s income taxes.


Our later experience with a lawyer and an accountant is an interesting one, especially the reason why we no longer have the services of either.


Seacoast Consulting Engineering
Located in Eliot, Maine
Professional Mechanical
& Electrical Engineers
Providing Energy Evaluations,
Power Distribution &
HVAC Design Services
207-370-SCE0 (7230)

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