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  #1  
Old 11-10-2010, 08:22 PM
poseidon poseidon is offline
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Default Bringing in new partner to my business

I have a start up business in WA state. I am in the launching phase. I have spent around 6K on this business.

I want to bring an individual in to be my business partner. What options do I have to offer? For ex, is it common to bring in new person as a 10% partner (meaning he only gets 10% of what we're making?)

And, if that's the scenario, will I get the other 90%? Thanks

What is fair because he hasn't spent any money and I've spent time and 6K?

Thanks for your help
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  #2  
Old 04-07-2011, 02:33 PM
cdogstu99 cdogstu99 is offline
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Default Question on Partnerhip and Proft Sharing

I founded a business about a year ago, and recently decided to take it in a new direction. Same name and premise, yet slightly different business model. I founded the company as a sole proprietorship and have roughtly $4000 invested into it. I recruited one of my good friends who has expertise in the industry of my business and offered him a 30% stake in the company to come aboard and work with me to grow it.


My question pertains to the actual revenues and profits of the business. The business is only us two..and you could say that now, both of us are putting in equal amounts of work. The business is not making money yet, but I am preparing in case it does start to bring in revenue. Without giving specifics we cell certificates for goods. Each particular sale lasts about 10 days and then we collect payment. My friend is still currently employed full time and wants to make this new business of ours a success. He is wondering how we would handle each sale. He was implying that maybe we could share profits on each sale with ownership still at 70/30. I'm not sure how to best structure this..i mean since i started the company, should i be sharing the profits like this? I don't want to screw up our friendship, but i need an agreement that is equitable and fair for both of us. Any ideas?
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  #3  
Old 04-09-2011, 03:57 PM
David Staub David Staub is offline
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Default

The choices are almost endless. You can split the overall profit, you can split the profit on each sale, you can pay a commission to one partner on each sale and split the remaining profit, etc...

They key is how you want to reward each partner for what he brings to the business, particularly where you need him to keep bringing something to the business. Capital, knowledge, time, effort, contacts and many other elements contribute to the success of a business. You really need to think about that BEFORE you decide on how you are going to divvy up the economic benefits.
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Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.
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