Fractional CFO subcontractor agreements: who may introduce a client, and how to agree it

The short answer: the agreement decides, so settle it in writing first

Whether a 1099 CFO or the CFO firm that placed them may introduce a client to SourceX depends on the subcontractor agreement, chiefly its client-ownership, non-solicitation, confidentiality and outside-activity clauses, and on state contract law, which varies. Credit goes to whichever valid referrer introduced the company first, as long as the company's application is verified within the attribution window, so a race between firm and subcontractor helps nobody. Agree in writing who asks the owner and who registers, before either of you acts.

Boutique CFO firms that staff engagements with independent CFOs put those CFOs in the monthly close review, the cash forecast meeting and the board pack. That is where a CFO notices a client with years of records across many systems. The contract, though, usually puts the client relationship with the firm.

What the clauses actually say

No single statute governs these clauses. Whether a non-solicitation or other restrictive covenant can be enforced is a matter of state law and differs from state to state, so read your own agreement and take advice where you practice. The wording below paraphrases common drafting patterns; it does not quote any agreement.

What federal law adds: work product, client data and tax reporting

Two federal points come up in these agreements, though neither decides who may refer.

Work product is not client data. Copyright in a work made for hire belongs to the employer, but work by an independent contractor counts as made for hire only if it is specially ordered or commissioned in one of the statutory categories and the parties expressly agree so in a signed writing (Copyright Office Circular 30). That is why CFO firms use assignment clauses for models, dashboards and board decks; copyright ownership can be transferred in whole or in part (17 U.S.C. 201). None of this gives the firm or the subcontractor any right to the client's own operational records. Only the client company can license those, through its owner, CEO, CFO or another authorized representative.

Tax reporting follows the payee. The firm reports what it pays a subcontractor on Form 1099-NEC when the IRS conditions are met; the current IRS instructions for Forms 1099-MISC and 1099-NEC set the threshold, which depends on the year of payment. A referral reward is a separate payment from a separate payer, and referral income is generally taxable to whoever receives it (IRS Publication 525).

How it applies in common situations

On the last row, the guide to white-label fractional CFO services covers how a CPA firm's rules shape the introduction. Subcontractors carrying clients for several firms meet these questions more often; the piece on how many clients a fractional CFO should have looks at that workload.

A written note that settles it before anyone contacts the owner

An email confirmed by both sides is often enough. Adapt this with your counsel:

Disclosure and consent good practice

• Ask the owner first. The cleanest route is the owner applying at sourcex.si/apply through the registering party's referral link, which keeps the credit attached without anyone else handling information.
• Tell the owner in writing that the introducer may receive a reward paid out of SourceX's fee, and that nothing is subtracted from what the company receives.
• Share fit signals only. Partners never export, upload or describe confidential records; the company prepares its own data inventory with SourceX later.
• If either party holds a CPA license, check the commissions and referral fees rules before registering; state boards can be stricter than the AICPA Code.

What the registering party should expect

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. Rewards become payable only after the buyer pays and SourceX receives its fee, and no reward is guaranteed.

After the introduction, SourceX checks fit with the company's sponsor: a US company with 50+ full-time employees at peak (contractors excluded), a multi-year documented track record and clear title to the records it would license. The company then lists its systems in a data inventory, agrees price and terms, and buyers review. The CFO's role ends at the introduction, which matters when a subcontractor agreement limits work for firm clients outside the engagement scope. The comparison of interim and fractional CFOs explains how scope and records access differ by role.

Questions to ask your counsel

1. Does my client-ownership clause cover introductions to third parties, or only services I perform?
2. Does the non-solicitation or non-circumvention clause treat a paid introduction as solicitation, and is it enforceable in my state?
3. Does the confidentiality clause let me name the client to an outside company with the owner's consent, or do I also need the firm's?
4. Under the compensation clause, who is entitled to a referral payment connected to a firm client?
5. Does my schedule of pre-existing relationships protect owners I knew before joining?
6. If the firm is acquired, how do these clauses change? The guide on a CPA firm acquiring your fractional CFO firm covers that scenario.

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

Next step

Agree the introduction note with the other party, then screen the company with the company fit checker. Once the registering party is settled, register as a partner and send the owner your referral link. The page on referral opportunities for fractional CFOs covers which clients tend to fit.