Partnerships/LLCs/Startups halp

blong131

blong131

Active member
as alot of you know, ive failed majorly in pulling the trigger on appleheadz. working 50 hours a week on wall street isnt helping.

however, ive finally found a business partner to make this happen. he has the execution/databasing/tax/back room skills that i dont, and i have the concepts/designs/business skills that ive been working with for a while.

i know there's alot of startups on here, so i have a question for those of u who know anything about this. How do we go about this most effectively? is a written contract "you have 30% i have 70%" enough? do we go through a lawyer and setup an LLC? do i just employ him or contract him through the sole proprietorship i already have setup? ive been doing alot of research, but im curious to hear from people who've done it. feel free to PM me if its the kinda thing you dont wanna be public about.
 
???

appleheads03.jpg


really though i think it all just depends on what you and him may agree on. if its a multi-million corporation i suggest a lawyer but till then it's probably cool to just write something up
 
This is probably one of the most important things you're going to do, it would be well worth your time to do some real consulting as opposed to just posting on NS. If you have friends or family or anybody that is a lawyer or entrepreneur i highly advise talking to them.

What you have to realize is that whatever deal you setup now you will be stuck with, you want to add clauses that address any hiccups that will occur in the future. Looking at the worst case scenarios will help you decide which path to take.

I'm currently majoring in entrepreneurship and might be able to help you out a little bit if you need it but i don't know anything about your business or the relationship you have with your business partner, if you want some help feel free to PM me and i'll do my best.
 
I'm going through a similar thing right now. I think I'm going with a corp and divvying up shares as I see fit. Entrepreneur.com is very helpful but you should still talk to an accountant and lawyer. PM me if you have any other questions.
 
I dont think NS is the best place to ask this... the age average is like 13... but you should defenitely ask and talk about it to a lawyer
 
Maybe I had a bad guy but the person I talked to was the opposite of helpful. I met him twice back in April and tried emailing and calling him and no answers. His receptionist was snotty and it was an all around bad experience.
 
all of those are pass through entities so if you have 70% and he has 30% then you will have to claim 70% of the income on your personal tax return and he will claim 30%. You probably knew that but it is worth mentioning just in case. If there are losses in the business then you will claim 70% of the losses on your personal tax return and he will claim 30% of the losses.

You would specify the distribution of earnings and profits in your partnership agreement or I guess in your LLC operating agreement. You could probably form the LLC then write up a contract spelling out the split incase you decide to add someone to the team later or one of you wants to leave.

Depending on your type of business this could be a big consideration: liability protection.

a sole proprietorship offers no protection and a regular partnership offers no protection. only the LLC will provide liability protection. This could be really important if you are demoing ski equipment or something like that.

No matter what you choose, make sure to spell every single thing out in writing and both sign it. You don't want to leave anything open for a possible dispute to arise down the road.

What type of business are you starting?
 
are you going to elect to be an S-corp? You need to file the election within 75 days of the start of your fiscal year so keep it in mind when you start your corporation.
 
You've got a lot of work to do...

To start, go to your Secretary of State Department and get some information from them on what would best suit your company to register under. Many startups register as LLCs. If you don't know where this is in your state, you can find it and everything else you need to register on your state's government website.

Create a feasibility plan and a business plan for your company (this part sucks...) that you can show potential investors. For starters, perform a SWOT analysis and analyze your market very concisely. Your business plan will be your company's bible, for lack of a better description. An elevator pitch is another tool that startups can use to quickly catch the attention of potential investors.

Most of your startup income will be out of your own pocket unless your business really has a high feasibility in today's economy. If that's the case, you could probably land some great investors to get you started, although this is pretty rare.

As a startup, you might not have the funds necessary to seek professional advice from a lawyer, accountant, or entrepreneur, but you can find pretty much any information you need on the internet nowadays. I recommend you utilize as much free information as possible and educate yourself on being an entrepreneur.

There's much more that goes into creating a solid startup company, but I'm sure you can find all this information and more on your own. I hope this helps you out a little bit. (I graduated with a bachelors in entrepreneurial management in case you were wondering if I'm legit.)

Feel free to contact me if you want more info, but I can't guarantee I'll be able to reply too often... I'm not on NS much anymore. Being an entrepreneur keeps you super busy ;)
 
alot of people around here have seen it, but for those who havnt:

16455_192054202004_187428862004_3144333_5613692_n.jpg


thanks to everyone who gave great replies! weve been hammering down on it and are pretty deep into the formal business plan. theres finally some organization to the project with deadlines, etc. im excited to see where it goes.
 
Im impressed that that there are other accounting majors and other people that have real useful information to provide for once. But if you have any questions or things we can help you with feel free to shoot me a pm also.
 
were both finance majors, together we know our way around most monetary/business things. however, splitting the partnership or whatever is such a touchy law subject. i guess well probably just go through a decent lawyer so as not to fuck that up haha
 
you probably know a friend who is a lawyer or who has a parent that is one. partnership agreements aren't that complicated and I would definitely ask around before paying someone to draft one for you. most lawyers will just have a boilerplate agreement template and they will fill in the blanks with your information. Not really worth blowing all your start-up funds on.
 
You must log in or register to reply here.
Back
Top