Posted: 6/6/2016 12:49:31 PM EDT
| I already have a LLC for me. Me in a buddy are wanting to start a business together. What's best for both of us? |
|
Quoted:
I already have a LLC for me. Me in a buddy are wanting to start a business together. What's best for both of us? I subscribe to the notion that its never good to have a partner, and if you do its best if its not friends or family. There are other ways of working together or employee / sub relationship, splitting the business into two aspects, that is more likely to be healthy longterm. |
|
Am a serial entrepreneur. Partnerships suck. NEVER has worked. ALWAYS had issues. SUCKS. Of the two somewhat successful companies I have birthed, the first was only so once the partner was bought out at great expense. The second has my wife as a Partner, and she is wonderful. Never start a business with a Partner. If you are foolish enough to do so, have 51%, and understand that in business, a 1% partner can be a total nightmare. If you do not see the risk now, do it, and you will learn soon enough. If you are considering it, I will bet you never tried to build a business with a partner before. You will learn why... Find another way to make it happen. The various legal entities are all VERY similar. Get advice from a lawyer on the best flavor. Take the "Corporation" requirements seriously, the gov does. You will want your lawyer as the registered agent. And get a good CPA. We use Jamie Pritchett CPA in Woodstock for the last 11 years. Highly recommended. Look into an umbrella liability policy if you are firearms related in any way. Get a personal policy until you can afford a corporate one. Do not violate the corporation by intermingling personal and business transactions. My best advice is to NEVER QUIT. Just keep forging ahead, learn fro your mistakes and keep pushing forward. Do not quit, that is a guaranteed fail. And GOOD LUCK! |
My business was started as a partnership between my father and I. A 50/50 split. However, according to him, I may have been the President and got to make ALL the decisions, but he was the CEO and got to say yes or no.  It was a successful, but somewhat rocky partnership, that lasted nearly 4 years, until his death in 1995. Funny thing, I seldom appreciated his wisdom and advice, til it was no longer available. 
If you DO go the partnership route, you'll each need to respect the other's positions and input, and work diligently to find areas of agreement, while finding ways to minimize those areas of disagreement. It's easy to agree before the business starts, or even at the beginning when the excitement is still fresh and things are going well. The problems begin much later, as one partner devotes more time or $$$ to the business, as the other begins to get jaded. That's when it's time to decide to pull together, or possibly pull apart..... One of my father's greatest pieces of advice was on how to end a partnership. I utilized this method once when I dissolved a partnership where a buddy and I bought a house together to live in, instead of renting a place. It must be agreed upon beforehand that the results bind BOTH partners. Ed's partnership dissolution resolution for two partners: One partner flips a coin. The other calls it in the air. The winner of the toss gets to set the price for the business (or whatever it is the partnership owns), and the loser gets to say whether he wants to buy or sell, at the price set by the first partner. Obviously if the winner sets the price too high, the loser will decide to sell, and the winner pays the inflated price for the item being disbursed. The converse will also be true. I cannot think of a more fair way to end a partnership. In my case, I won the toss, but I was getting married, and needed the funds for relocating and buying another house. I didn't have time to try to market the house, so I set the price slightly low, so that he had incentive to buy me out. Had I wanted to stay in the house, I would have set the price much higher to give him incentive to sell out his half to me. We ended the partnership on very agreeable terms, and remained friends until his death, a few years ago. I wouldn't necessarily recommend a partnership, but if you go there, have an exit plan in place before you start. |