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re: Give me insight on partnerships please
Posted on 7/19/23 at 3:59 pm to FinleyStreet
Posted on 7/19/23 at 3:59 pm to FinleyStreet
quote:
You should start a restaurant business and then pay a 1099 employee to take 40% of the profits. No contract required.
0
Posted on 7/19/23 at 4:11 pm to Thundercles
I wouldn’t go with an actual partnership for liability and other reasons.
You would probably want to go with a LLC. You can structure the deal however you want in an operating agreement.
You would probably want to go with a LLC. You can structure the deal however you want in an operating agreement.
Posted on 7/20/23 at 5:19 am to BabysArmHoldingApple
The LLC operating agreement or partnership agreement should address how future capital calls will be handled. (Say the company needs an infusion of cash, and only one guy has any. Will his interest increase as a result? Will the other guy have to repay him from future distributions? Something else?)
It also needs to address control issues. If it is 50/50, there has to be a tiebreaker mechanism or the company can be paralyzed by deadlock. There should also be methods spelled out to buy/sell the interest of the other in the event of death, divorce, bankruptcy, etc. You may not want to be partners with his ex-wife or the kids he leaves his assets to in a will.
Similarly, it may address transfer restrictions that limit a member's ability to sell any of their interest without the other's approval. You wouldn't want your partner to be able to sell out to some corrupt jerk who is now your new partner.
There are lots of things like this that an experienced business lawyer can help you spell out up front. If not, and a problem comes up down the road, it will be too late.
It also needs to address control issues. If it is 50/50, there has to be a tiebreaker mechanism or the company can be paralyzed by deadlock. There should also be methods spelled out to buy/sell the interest of the other in the event of death, divorce, bankruptcy, etc. You may not want to be partners with his ex-wife or the kids he leaves his assets to in a will.
Similarly, it may address transfer restrictions that limit a member's ability to sell any of their interest without the other's approval. You wouldn't want your partner to be able to sell out to some corrupt jerk who is now your new partner.
There are lots of things like this that an experienced business lawyer can help you spell out up front. If not, and a problem comes up down the road, it will be too late.
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