Individuals enter into management arrangements for business management functions. Some people might like to manage the business as they might not have enough resources to out-rightly purchase it.
Other reasons for entering into management arrangements are:
The owner doesn’t want to run the company and have somebody else run it instead without selling it, the would-be purchaser might want to test run the company prior to purchasing it;
The seller and purchaser have signed an agreement for the deal of the company having an extended settlement date but the purchaser wants to begin running the company immediately.
A few of the items which should be attended to when entering into a management deal for a company are:
Details of the parties and their various rights and duties
The goal of the management arrangement and the actions to be undertaken by the manager
The duration of the management agreement and any renewal of the agreement
Any fees to be paid to the company owner for letting the manager to manage the company
The remuneration of the manager and whether the manager will be entitled to the profit and additionally be responsible for any loss
Duties of the manager for repairs, maintenance and replacement of any equipment and chattel of the company
The operation of the company by the manager and maintenance of appropriate banking and bookkeeping records, and adherence to all applicable national and state laws