I have bad credit, but my cousin has great credit and we want to purchase an established business together?

Question

Im only going to get 20% of the profits, how do we go about doing this legally. My social would not be in any of the paper works or loan. Would we need a lawyer to create an agreement form for us that is signed and dated. Also noted that 20% of the profits will belong to me. Thanks

Answer 1

You could form a partnership or corporation to buy the business. Buying with someone else is a major risk since he will be 80% owner you might expect him to do 80% of the work but he might think you should do 50%.
Why does he want you as a partner if he has to get the loans? You are risking your down payment if you aren't on the paperwork but he is risking his assets like his home. Are you only paying 20% of the down payment?

Answer 2

Specially when doing business w/family you better get an agreement. In order to qualify for financing you should make yourelf less than 20% owner, or else they will have to consider your financial picture. You may want to note that you will also be responsible for 1/2 of all liabilities. Think this through and do the math. Don't let your head get so big because of your 20% profits (which you haven't made yet) that you make rash decisions. By the way, if it is a new business you will need some cash down..yup you heard correctly...You have been educated. Good luck

Answer 3

You should pay off all your debt and establish credit AND substantial savings before buying into a business.

Answer 4

You have bad credit BUT you have enough money to buy into an established business?

Answer 5

I'm sure you can get your cousin to co-sign. Get a good lawyer too though.

Answer 6

I would NEVER do business with a family member.

that's just my advice.

get a lawyer too.

Answer 7

gat an attorney