First of all, this is a really smart query. I don't know if I will be able to answer this or not but let me try.
A partnership is similar to a sole proprietorship, and each partner owns a portion of the business’s assets and liabilities.
With more than one person making decisions and affecting outcomes, different aspects of starting and running the business need to be addressed up front. Although not required, I strongly recommend that partnerships have a partnership agreement in place to detail the business ownership and responsibilities of partners. The clearer and more complete the agreement, the less that is up for debate or disagreement when partners don’t quite see eye to eye.
Sometimes, the unexpected happens. It’s what makes business so exciting—and unnerving at times. Your partnership agreement should address possible scenarios and concerns, such as:
A partner getting sick or dying—What happens then?
A buyout—How will the business be evaluated (and what is the split) if an offer is laid on the table?
Circumstances under which you can modify your partnership agreement—and the process for making changes.
I can just give an illustration that in such scenarios you can check with consultants and reach out to the consulting industry for guidance. While I understand that focusing on a hundred other things, you do not want to focus on the consulting part initially, there are many websites and companies that provide you information and intelligence on the consultancy part.
Please feel free to connect if you need to discuss more on the agreement part and if there is any challenges, I have a close friend who has just helped his company pull off a similar headache (pun)
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I am looking for advice on an important business venture I am about to embark on. I am 32 years old and I've been working at a small studio for 9 years. I started as a designer when the studio only had 8 employees and have moved up to become Art Director and Project Manager. The studio now employs about 20 workers. The studio is owned by 2 brothers, with almost equal share between them. I have become the 3rd most important person in the company. Throughout the years we have had an excellent work relationship and my bosses have always been fair to me - giving me more responsibility and being compensated for it. About a year and a half ago I was offered to be a partner of the company - there was talk of giving me a small percentage (1-3%).
When I recently married, my wife and I began thinking of relocating to the US. My bosses always dreamed of opening a second branch of the studio in the US but the right opportunity never presented itself. When I told them about my plans to relocate we immediately started talking about me opening the studio in the US. My main role would be to bring in new business and as well as manage the US projects - while most of technical work will still be done in the main studio. It is assumed by all partied that at first I will be the only one working at the US studio and only once it becomes necessary to hire employees (because of work load and other factors). I will soon begin negotiations in more detail. This is the first time I go through something like this. The advise I am looking for is in regards to partnership structure, salary, percentage split, and relocation package. Of course I will eventually consult with a lawyer who will look at the contract, but I wanted to get preliminary information for the negotiations. Some information to consider:
It has already been agreed that I will become a partner in the new "sister" company
I will not be putting any capital myself, my bosses will be funding this new venture entirely
It has already been agreed in principal that I will be receiving a salary along with partner dividends
I am assuming that I am the active partner because I will be the most involved in the daily operations. My bosses (partners) will offer advice, guidance, and will help with the decision making but I don't think they will be as involved with the daily operations. Does that make them limited partners?
What is a fair percentage split in this situation? My bosses have mentioned an even 33.33% split. Is this fair to me? Should I have a higher percentage because of the relocation, amount of time and effort I will be putting in? (40-30-30?) Do I have more of a liability because I will be the only one at the US company?
Should I invest my own capital in order to have more leverage, even if I don't have to put in any money?
Is it fair to ask for a 25% raise from my current salary considering my new responsibilities, status as a partner, a higher cost of living at the new location?
Is it reasonable to ask for standard social benefits (health insurance, pension, etc) in addition to the salary raise? I assume yes, it shouldn't matter that I am relocating to a new country
Is a salary raise in store if the company meets or exceeds it's target goals each year? Should the raise be a percentage of the profits?
Besides the initial capital for overhead costs (office, computer, accountant), should I also request emergency capital in case of emergency? If so, what is a reasonable amount?
Is it reasonable to ask for a relocation package (moving costs+cash stipend) to help with the move? This seems common, no? Is a $5k stipend reasonable? (remember it's a small studio with no experience in relocating workers)
Assuming the worse, lets say the new venture doesn't take off, should there be a set limit to how long my bosses are willing to support this new business venture? If so, what is a common time frame?
Lastly, going back to the small percentage I was offered in the main studio before any of this relocation came up - let's say I continue to assist in the production of the work in the main studio, is it fair to ask for that small percentage I was offered?
Another general question, do any of these things change if the new sister company is doing well? Meaning, in the beginning they are putting all the capital and it might take some time for the new company to make a profit. If the new company is at a point where it is sustaining itself, plus employees, plus still has profits - do any of these percentages or agreements change?
Thank you for taking the time to answer. If you could please advice according to the numbered list of questions, it will help me keep the advice organized.