We are soon to be related by marriage, (his brother). we started 3 years ago and now we are incorporated. I never asked for anything but I finally woke up. he is living high on the hog while i still strggle. he put the money up initially but without me the business wouldnot be .
2006-06-27 09:46:25 · 7 answers · asked by calisweet61 2 in Business & Finance ➔ Small Business
It was his idea. he wanted to start his own business but couldn't find the right person until I helped with a brochure for him and that's when he asked me. our company is successfully bringing in on average 40,000 a month
2006-06-27 09:59:10 · update #1
I agree with some of the other posters that this will likely become a nightmare. Regardless how you assign value to your contribution one or both of you will harbor resentment towards the deal. You have already stated that without you the business would not be so you place an awful lot of value on your services. He on the otherhand will look at all the equipment, office space, furniture etc as stuff he paid for. I have been involved in several partnerships and what they say is very true, most do not work out.
Ideas and ablitity are great and have value, but the true risk and sacrifice is often attached to the person that puts up the money. If the business fails what are you out except an opportunity, he is out/liable for real losses. You should be very concisous of this fact and fully acknowledge it to him and in your dealings. This will not only show you understand and appreaciate his commitment but likely make him think about yours.
If your insistant on proceeding you need to realistically take into account what a person preforming similar services would make if employeed at a competing firm. You should approach the business as if your a partner with a debt to the company. If you do all the work and he does not participate in the company you should draw a fair salary for your work, be accountable for your work then split the remaining profits equally. If he serves in some capacity he should draw an apporpriate salary as well. With your salary/share of the profits you should repay the company or your partner for your share of the startup cost with interest so that you will be an equal partner and the risk is shared accordingly.
IMO this is the most equitable way to handle this type of partnership. Its a very bumpy road and you should never agree on anything your not 100% comfortable with. Do not sign an agreement just for the benefit of the partnership or friendship if you walk away with any resentment cause that resentment will only grow with the sucess of the company. Be very realistic about your value and carefully consider and try to understand what your partners value and risk is.
Even after doing all this, there is no guarantee that your partner will apporach things the same way. That is why it is equally important to discuss on the front end of things how disagreements or a seperation will be handled. Always have a plan in place if possible to buy out your partner or in need be ready with a fair price for him to buy you out. Also make sure your partnership agreement or corporate docs address such issues as divorce, criminal prosecution etc. If he gets divorced you could find your business and its assets pulled right into the proceedings. Addressing such issues upfront and in writing will facilitate things later on.
All this is just my opinion so take it for what its worth and what you paid for it. The best advice I could give anyone would be for each parties to have their attorney review any agreements before they are signed. As with addressing some of the issues I mentioned upfront, a little money spent on an attorney going into the deal could save you countless headaches and legal fees trying to get out of it.
Good Luck!!
2006-07-08 06:39:42 · answer #1 · answered by SNCK 3 · 1⤊ 0⤋
There are several avenues you want to explore: 1. You are the only one working, well set your self a salary in addition to you share of the profits. 2. Ask for the profits to be split more in your favor, say 60% - 40%. My best suggestion: 3. If the business is "you", then offer to buy him out. Come up with an agreement where you can pay him a monthly sum over 2 to 5 years (depending on what he is willing to put up to) Pressure him by saying that unless you come up with an agreement you'll quick and start the same business from scratch. Be willing to make it happen if he call your bluff. Good luck.
2006-06-27 12:45:44 · answer #2 · answered by madrax 3 · 0⤊ 0⤋
It is the skills that keep the business running. The money just makes it happen. Whose idea was it in the first place? The one with the idea would write up the agreement, the other would either agree to it, or suggest other items to be included in the agreement which would be negotiated until a mutually agreeable agreement is made. It would be up to the negotiators as to what to include in the agreement. It is also possible to say "no" and walk away to any agreement.
2006-06-27 09:56:10 · answer #3 · answered by Morrisevers 5 · 0⤊ 0⤋
That should have been worked out in an agreement. It's whatever y'all agree to... then and now.
The profits should have been split some % to you and some % to him or for every dollar he puts in is worth something and for every hour of work you put in is worth something. If you aren't happy, renegotiate or sell your part.
A CPA with a business valuation background should be able to help value your business. The business should be valuated anyway for the cost basis, buy/sell agreements (in case one of you gets injured or dies), and if y'all could use additional partners. It could be used to bring in new partners, and their money, as a grow-the-business plan. Maybe y'all could start an ESOP to motivate new employees (and so you can get out).
2006-06-27 09:54:33 · answer #4 · answered by Anonymous · 0⤊ 0⤋
This is very fast going to turn into a "Nightmare" !
The up coming marriage will be a good excuse to bow out and start your own thing.
If you do not follow this advise be prepared to be miserable !
Think of it this way,new marriage,fresh start,new business.etc.
Or spend day after day arguing with your new husband about
his brother,what to do at thanksgiving,family gatherings,ect.
GET OUT !
2006-07-05 11:18:32 · answer #5 · answered by ? 6 · 0⤊ 0⤋
There should have been agreement at the beginning..Talk to him..Without knowledge it's impossible for any business to grow. What type of business do you have?
AND how are the papers drawn up, what percentage of owner are you? everything should be 50/50.
2006-06-27 10:09:36 · answer #6 · answered by Anonymous · 0⤊ 0⤋
The agreement should be 50/50. You need knowledge (skills/idea) and without it, a biz cannot grow even though there is sufficient funds (capital). Without the funds (capital), a biz cannot grow even though the knowledge (skills/idea) is available.
2006-06-27 09:49:10 · answer #7 · answered by I.B. 1 · 0⤊ 0⤋
70 % him, His idea his money.
20 % you, some logistical help and advice.
10 % ME, less help and advice. JK
But if it was his money and original idea, how much did you contribute. Be honest, not greedy.
If you get layers involved it will end up 20% him, 20% you, 60% legal fees.
2006-07-08 16:40:56 · answer #8 · answered by H. Hornblower 3 · 0⤊ 0⤋