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 www.irs.gov.

 

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.

By Lee Consavage

I began my engineering career in 1984 at the Portsmouth Naval Shipyard (PNS). After working for PNS for 12 years, I took advantage of monetary incentive being offered to any federal employee agreeing to leave the federal government during the downsizing that occurred in March 1996. I then worked for 3 different consulting engineering firms in Boston from 1996 until October 2001, when I returned to PNS. During that time I commuted daily to Boston while still residing in my southern Maine home. As it turns out, several of my future partners also took the same path, working for private companies for several years before returning to the shipyard in 2001 and 2002. The economy at that time was hit with the double whammy of the 9-11 World Trade Tower attacks and a recession. Private companies were now downsizing. But PNS was hiring. In fact PNS was actively contacting engineers who had left to now return to PNS, with all benefits reinstated (just like we never left). So I returned.

In early 2005, however, rumors were rampant of the impeding closure of PNS as a result of the 2005 Base Realignment and Closure (BRAC) act. The purpose of this action was to close or realign 25% of all military bases located in the United States. Not wishing to relocate or to start commuting to Boston again, I decide to start a new consulting engineering business here in Kittery. But I wasn’t about to undertake this endeavor on my own, especially since I had no experience with starting and owning a business. So I asked 6 highly intelligent, hard-working, and very personable fellow PNS engineers (whom I very much enjoyed working with) if they would care to become partners with me and establish a new consulting engineering company in southern Maine. All enthusiastically said “YES!”

By the end of May in 2005, we learned that the Portsmouth Naval Shipyard had officially made the recommended list of bases that should be closed. Making the list did not ensure closure since members of the Base Realignment Closure (BRAC) committee still had the final say. But historically speaking, once you make the list, your chances of getting off the list are less than 95%. The news brought sadness to all of us - this historic 205 year old shipyard, which had survived many closure threats in the past, would finally cease to exist. But we were also glad we had begun preparations for our post-shipyard livelihood. We anticipated it would take 2 years before we were officially laid off by the shipyard.

 

Just a little background about this historic shipyard and the history of shipbuilding in general in the Seacoast area of Maine New Hampshire: Building naval ships in this area began in 1690 when the HMS Falkland was built for the British Royal Navy. John Paul Jones USS Ranger was also built in this area. In 1798 the US Congress established the Navy Department and in 1800 the Portsmouth Naval Shipyard was established as the first permanent shipyard devoted exclusively to the construction and repair of vessels for the US Navy. During World War I the shipyard began building submarines and during World War II more than 70 submarines were built at the shipyard, including 3 submarines that were launched on the same day. No other public or private shipyard has matched this record. So shipbuilding in this area was not just a job, it was part of the culture.

 

By this time, several of us had already read books pertaining to starting and operating an engineering consulting business. I had also read books about setting-up accounting methods for our business. Tim O’Connell Jason Orr took a course on how to start a business. And we eagerly sought advice from other engineers with experience in owning a consulting business. Fortunately one of our partners, David Plante, knew 3 local engineers; Rick Cloughlin (Great Works Engineering), Rich Nowak (CEVONCorp.com) Eric Flinkstrom (EF Consulting) who had started their careers at the shipyard and now all own successful engineering firms. David communicated our situation with all 3, who not only provided us with great advice but also with office equipment, furniture, reference books and files! An instant office!

 

Rick Cloughlin owned the entire office building which housed Great Works Engineering located in South Berwick, Maine. When devastating hurricanes damaged many homes businesses in Florida in 2004, Rick joined in the effort to evaluate the damage and help out with the reconstruction. Rick enjoyed his work in Florida so much, and was spending some much time away from his home and office in Maine, that he decided to sell his office building and donate whatever he no longer needed to us. Rich Eric also had offices in Rick’s building and similarly donated much of their items to us. We didn’t have an office but we suddenly had a lot of neat stuff.

 

Rick, Rich Eric also provided us with our first 3 jobs. So not only did they give us all their cool stuff, they also gave our new company our first income.

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