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Owning a business soon, got some questions.

Discussion in 'Random Discussion' started by HandleX, Oct 8, 2008.

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  1. HandleX

    HandleX Thread Starter

    Joined:
    Mar 18, 2006
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    Im about to own 50% of a business with another business partner of mine. The business is already established and will grow even more.

    The partner is loyal and trustworthy, we are going to an attorneys office to settle everything in a week. The business is already established but there is national future expansion along with the renting of a new store this week. I am not liable for rent or utilities.

    Since this is the first time I will ever be doing something like this, I was wondering what questions should I be asking to make sure that my *** is covered and taken care of should anything happen.

    Drop any questions you think i should ask and anything else that is important to know as a business partner should know.
     
  2. ekim68

    ekim68

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    First Name:
    Mike
    Is there a lease on the building? If so, for how long?
     
  3. Drabdr

    Drabdr Moderator

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    Brad
    These are thoughts from my experiences:

    Partnerships are kind of tricky business. Look at it this way:
    If that, for the most part, is the truth of the partnership, it may become unbalanced fairly quickly.

    I would establish an LLP. One of you will have to accept unlimited liability in that. Or, go ahead and establish a corporation.

    I might establish dual signatures on stuff for a while. Do it up front. Also, I would establish an exit strategy. This is not a marriage; it's business:D. Saying, if you or your partner is not happy, wants to do other things, etc., you should have a plan for splitting things, assuming control, valuing the assets, etc. Also, you need to make plans for future expansion, bringing someone on, etc. NOTE: This should be just putting down in writing things the two of you have already discussed.

    Mainly, you cannot overcommunicate your goals, thoughts, responsibilities, etc., and with two guys, that's no short order. Good communication will minimize the need for legal coverage. The legal coverage is just in case.
     
  4. BanditFlyer

    BanditFlyer

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  5. Wino

    Wino

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    Hire your own business lawyer - DO NOT USE YOUR PARTNER'S lawyer. Spend the money now - you will never regret CYA. If this upsets your partner - walk away.
     
  6. Davec

    Davec Gone but never forgotten

    Joined:
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    You probably meant LP or LLC. A general LLP definition is:

    A Limited Liability Partnership is essentially a General Partnership (see What Is A GP, LP or Partnership?), but each partner is not to liable for certain acts of other partners. State registration is required and some states require proof that the partnership has obtained adequate liability insurance or has adequate assets to satisfy potential claims. State law typically limits LLP's to formation by accountants, lawyers, architects and/or similar professionals.

    LLCs are the current flavor of the month.
     
  7. Drabdr

    Drabdr Moderator

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    Brad
    Thank you, Davec; I stand corrected.(y):)
     
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