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Question

Business partnership financials

by Willemnel001 / January 4, 2015 1:46 AM PST

Hi there, i am a new business partner together with a partner that has had his business for 15 years already. We started up the new venture together and there is just some questions i have regarding the sharing of profits ect. He provided all the capital for the venture and i am doing all the pfisical work, i am drawing monies out for personall use almost like a salary. His idea is that the business has to pay him back the initial capital, and he also wants to take the same amounts as me plus also share the year end profit 50/50. My partner is not at all involved with the day to day of the venture and so my question is - is this the right way the financials must be split? Am i the managing partner and is intiteled to a monthly salary? I realy dont know? Please help.

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All Answers

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Answer
Business partnership financials
by adagencysaroj / February 9, 2015 6:29 PM PST

We started up the new venture together and there is just some questions i have regarding the sharing of profits ect. He provided all the capital for the venture and i am doing all the pfisical work, i am drawing monies out for personall use almost like a salary.

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Re: partnership
by Kees_B Forum moderator / February 9, 2015 7:03 PM PST

You should discuss it with a financial adviser or lawyer you both trust, or (maybe even better) have your lawyer and his lawyer prepare a proposal.

Kees

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Need info for the lawyer
by testingaa / April 25, 2015 4:27 AM PDT
In reply to: Re: partnership

I'm in almost the exact same situation, except on the other end. The difference is that I am still providing benefit and services to the business, but not so much on the ground with employees and product management.

I help from a business process, marketing, website management, event creation, and risk management point of view. Granted these services don't always take 40 hours a week to complete because of my vast experience with these areas and my skill with engaging with each. They are also extremely valuable to a successful business when small start-ups have such a high rate of failure.

I've spoken with an attorney and financial advisor. They've stated that they can help draft the paperwork to ensure whatever terms we're comfortable with, but that we need to figure that stuff out and they can draw up the paperwork.

Could this community share some of their business structures for similar situations? Possibly include anything they learned, changed, or wished was different as well?

Thanks in advance for any feedback.

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Odd.
by R. Proffitt Forum moderator / April 25, 2015 4:41 AM PDT

All lawyers I've dealt with have skills to get that information together. Time for a new lawyer?

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yup
by testingaa / April 25, 2015 9:02 AM PDT
In reply to: Odd.

Yeah I've found that a lot of the lawyers around here don't really provide a lot of value. Not just in this area, but others as well.

This doesn't keep us from sharing our experiences and situations - which is part of the value that a forum like this provides.

Hopefully we can still get people to share their arrangements.

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My experience.
by R. Proffitt Forum moderator / April 25, 2015 9:20 AM PDT
In reply to: yup

Is to get a CPA type person onboard the company and they usually deal with getting legal help. CPAs are like the cleaner fish for the sharks.
Bob

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OR
by testingaa / April 26, 2015 7:57 AM PDT
In reply to: My experience.

Or we can share our own experiences and all become exposed to a lot more information through the community than from a single source. Happy

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Which I did.
by R. Proffitt Forum moderator / April 26, 2015 8:00 AM PDT
In reply to: OR

Let's hope others chime in.

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Answer
In another venue, it's called....
by James Denison / April 26, 2015 8:51 AM PDT

share cropping. Whoever owns the land gets equal or more than the person is farming it.

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Answer
Advice from financial advisor
by jennyjenssen1990 / May 20, 2015 2:57 PM PDT

Hi, I think you should take immediate advice from a good financial advisor in this regard. He will not only guide you but will also provide you solution for fund problem.

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Answer
Business partnership financials
by elisagracedd / January 5, 2016 10:24 PM PST

Hi WillemneI001

My best advice is that you should have a talk with your friend on this subject. As you are saying that he provided all the capital for the business, then in such case it is obvious for him that he will keep this leg high. Further you can also take the advice of qualified lawyer.

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