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From an accounting perspective, hiring outside managers is cheaper than employing an individual full time. In addition to the obvious expenses of salaries, bonuses, and other compensation, employees can cost a company in more subtle ways, requiring further investments in benefits, payroll taxes, insurance premiums, office space, and equipment. Such additional costs aren’t required for external managers. Companies can use these individuals for specific tasks according to business needs, and can avoid the legal minefields of hiring and firing staff according to the ebb and flow of the market.
The enclosed document can provide a good starting point for your management services arrangement. You and your manager must continue to discuss the terms of your agreement, settling questions about work parameters, payment, and responsibilities.
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Posted:
08/07/09
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sample management services agreement

Management Services Agreement

MANAGEMENT SERVICES AGREEMENT This Management Services Agreement (the “Agreement”) is entered into as of _________ __, 20____ (the “Effective Date”) by and between ______________, a __________ [individual/corporation/partnership/etc.] (the “Manager”), and _______________________, a __________ [corporation/partnership/etc.] (the “Company,” and together with the Manager, the “Parties”). RECITALS WHEREAS, the Company is engaged in the business of ______________________________________________________________________; and WHEREAS, the Manager is experienced and skilled in the performance of general management, business advisory, administrative, fiscal, and accounting services in the Company’s industry; and WHEREAS, the Company wishes to engage the Manager as an external management consultant for the Company for the purpose of providing such professional managerial services as those services are more particularly set forth in Exhibit A attached hereto and made a part hereof (the “Services”) on the terms and conditions set forth below; and WHEREAS, the Manager wishes to provide the Services in accordance with the terms of this Agreement; and WHEREAS, each Party is duly authorized and capable of entering into this Agreement. NOW THEREFORE, in consideration of the above recitals and the mutual promises and benefits contained herein, the Parties hereby agree as follows: 1. APPOINTMENT/ACCEPTANCE. The Company hereby retains the Manager, and the Manager agrees, on the terms and conditions provided below and as an independent contractor and not as its agent, as an external management consultant to perform the Services on its behalf, as described more fully below. The Manager shall p