10+ yr business newly incorporated (added partner) how to structure "profit", I labor he is learning. losing $

Question

I started built+ labored ten years building motorcycle business and reputation. friend bought into half of inventory not tools and I/we incorporated. Im mechanic, pay 1/2 bills, get no "pay" and split profit monthly. when are we "even"? how should this be structured? Wife says I should be paid labor before profit is tallied and we are not equal partners, rather he should have paid me more than 1/2 for value of inventory and he should recieve less than 1/2 profits as we are not equal. He is learning all of it from books to bikes. Is he an investor and a trustee? When if ever and how is investment reached (consider losses?)as there are not guaruntees of return when investing and always a risk. We haven't seen an attorney yet and I'm fearfull of losing what I've worked for for an undetermined and/or indefinate commitment. I have not been relieved of any financial burden and am still hand to mouth monthly. PLEASE HELP WITH PROPER STRUCTURE AND CONTRACT FOR THIS SITUATION! HURRY!!! Thanks.

Answer 1

If you incorporated, did you issue shares? if yes how many to each? What is your title in the corporation and what is his?

Your incorporation papers should spell out your titles/duties

If not, draw up a list of what you will do and what he will do and make it an addendum to the incorporation papers.

Then,

Your wife is right, as the laborer , you should be paid for time spent on each job at fair market rates. If you worked for a Harley Dealership fixing bikes, what would they pay you per hour? That is your pre profit pay to yourself.

Then determine his exact investment versus value of the business. If he bought in for $10k and the business, if you sold it tomorrow is worth $30k then he is 33% owner and you are 67% owner and that is how profits at end of each month/quarter are split until the status or ratio of work to investment changes.

Answer 2

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