Figuring out a partnership of sorts
November 25, 2012 4:23 PM Subscribe
What kind of contract would I write for this?
A friend recently started a business and wants me to come on as a founder/partner. The initial plan was for me to take on a project as a contract, but she liked my ideas and is considering implementing them, so she would like me to join the founding team. However, the business is already registered and therefore cannot be registered as a partnership. She's asked me to draft a contract and I'm kind of confused as to how to word it or what kind of contract to draft. What kind of contract or partnership agreement would I use in order for us to work together with each of us having some form of ownership?
A friend recently started a business and wants me to come on as a founder/partner. The initial plan was for me to take on a project as a contract, but she liked my ideas and is considering implementing them, so she would like me to join the founding team. However, the business is already registered and therefore cannot be registered as a partnership. She's asked me to draft a contract and I'm kind of confused as to how to word it or what kind of contract to draft. What kind of contract or partnership agreement would I use in order for us to work together with each of us having some form of ownership?
Response by poster: Yes, insectosaurus, thank you, that's a no-brainer. I'm going to see one tomorrow and she will be giving my draft to her lawyer; figured there might be some legal minds here to help get me started towards the right direction. I'd also feel more prepared if I had something written down.
posted by lilacp at 4:33 PM on November 25, 2012
posted by lilacp at 4:33 PM on November 25, 2012
Since your initial question did not mention that you were meeting with a lawyer, I did not know that was part of your plan.
It probably will not be helpful to the lawyer if you prepare a draft. It probably will be helpful if you & your friend figure out your goals - what you want the contract to accomplish, how much of the business each of you will own, what will happen if you one of you wants to get out, etc.
It's the lawyer's job to translate your goals into a legally enforceable document.
posted by insectosaurus at 4:36 PM on November 25, 2012 [1 favorite]
It probably will not be helpful to the lawyer if you prepare a draft. It probably will be helpful if you & your friend figure out your goals - what you want the contract to accomplish, how much of the business each of you will own, what will happen if you one of you wants to get out, etc.
It's the lawyer's job to translate your goals into a legally enforceable document.
posted by insectosaurus at 4:36 PM on November 25, 2012 [1 favorite]
IANYL, but the mere fact that the business is already registered should not preclude a reformulation of the business entity as a partnership or a corporation with you receiving an ownership interest.
Having said that, by your question, I'm not sure where you are so I'm not aware of all the options that are available to you. Your lawyer will be able to provide with all the information that you need to make a good decision.
posted by mygoditsbob at 6:45 PM on November 25, 2012
Having said that, by your question, I'm not sure where you are so I'm not aware of all the options that are available to you. Your lawyer will be able to provide with all the information that you need to make a good decision.
posted by mygoditsbob at 6:45 PM on November 25, 2012
I think one big factor that will need attention is whether you are investing money and how that will be reflected in whatever type and amount of ownership you have. I think with some types of business entities you can also contribute other things, such as work or ideas, to obtain an ownership stake. But a lawyer, and business formation articles, would have much more information about that.
posted by Dansaman at 10:01 PM on November 25, 2012
posted by Dansaman at 10:01 PM on November 25, 2012
This thread is closed to new comments.
posted by insectosaurus at 4:30 PM on November 25, 2012