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General discussion

partnership, business start up

Jun 1, 2014 7:48PM PDT

I have an opportunity to start new business, I have some partnership questions?
My name is Rich my partners name is John we are 50/50 partners.
John contribution to the business is the ability to finance the new venture
My contribution is the ability to build (physical developed and build actual buildings) (value:saving Contractors fee) and manage the new business.
I will receive a salary of 150k a year, gas for auto expense, when we are at 75% potential it is increased to 180K

John is financing 4M, the business will pay all business expense including mortgage on 4M, on top of the
he whats 3% of 4M 120k a year, adjusts with pay down, last part is what Im having a problem with.

Discussion is locked

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Re: new business
Jun 1, 2014 7:52PM PDT

I strongly advice you to arrange a meeting with your lawyer and your partner and a trusted accountant to discuss the details of the contract.

Kees

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Moreover ...
Jun 1, 2014 8:48PM PDT

setting up a business clearly is a business expense so everything is paid for by the company, not by you.

Kees

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I agree entirely with Kees
Jun 1, 2014 8:06PM PDT

especially so with a venture where $4 million is being invested. I assume dollars, although you don't specify.

I don't entirely understand the question being asked. You have a problem with 'pay down'. I am no expert at all and I don't know the term 'pay down'.

But I would suggest that, where your proposed business partner is providing all of the start up capital and funding, then a legally binding contract and agreement between the two of you, drawn up by legal experts in business, is essential.

Mark

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structure
Jun 1, 2014 8:56PM PDT

my question is more the structure, what is fair, Im (the business) will be paying the mortgage on top of that he wants 3% interest on the money borrowed

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What is fair?
Jun 1, 2014 9:08PM PDT

It really is advisable to seek legal advice about this, and not to treat anything said in this thread as definitive, reliable or authoritative.

That said, what is fair is whatever is agreed between you and your proposed partner.

But I do make this observation: Since he is putting up all of the capital and you are contributing none, he holds all the purse strings. In my limited experience it is the money lender who makes all the rules.

Mark

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Do You Need Cash Loan?
Jun 25, 2014 5:03PM PDT

If you start up a new business, you need money to pay all business expense?

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Re: loans
Jun 25, 2014 5:10PM PDT

That would be discussed in the finance part of the business plan you make.

Kees

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Partnership business
Sep 11, 2014 8:33PM PDT

I also suggest you to seek legal advice. My business is an incorporate one so these partnership rules are quite unknown to me. My neighbour and his friend was doing partnership business. He also had issues but wasn't a similar kind. It was going well for few months but later on my neighbour felt like he's carrying the bulk of the workload. It might have happened because they hadn't have an idea or agreement about who would do what! Expectations also might have been different for each partner. He then consulted Cassels Brock lawyers at Toronto and it was solved within a month. They must have given some good advice on what to do. You also need a strong legal advice.

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Make a precautionary exercise
Oct 29, 2014 6:37PM PDT

You first consult your financial and legal advisor.

Remember one thing, you must tell your partner, that he should expect after the business gets off the ground. Also explain him, in and out, risks associated with this type of business. Of Course he would have expectations. But his early expectations should not bother you / your business.

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Must take advice from financial advisors
Jun 5, 2015 4:16AM PDT

Hi , I would suggest you that before going into any business partnership you must consult any well known financial advisor and business consultants so that all the partnership rules and regulations are clear to both of you and this will be good for both of yours business relation in future.