Hello everyone. First of all, do please forgive me for my illiteracy in the field of business but something has come up and I thought it would be best to ask you guys so here goes....
My friend, to whom I have been acquainted with since school, and I have decided to set up/launch a business. But to start off with, we are really struggling to settle with shares as himself and I are both bringing two completely different things to the table. Not a good start to partnership right?
What he is bringing to the table is what I would call financial assets which I shall be referring to quite commonly throughout this thread. Anything money related will be dealt with by himself. Whereas with me, I have experience in the same business I had been working in before, skills, contacts, academic qualifications, major being in Mathematics but also a keen programmer and electrical engineer to bring to the table which I shall refer to as intellectual assets. I have and know everything to start up this particular business EXCEPT financial elements therefore my contribution in this regard will be none.
Now, the subject in question is, what percentage of shares should he and I be getting? I was thinking of proposing 50/50 ownership of company but 60/40 of net profit for himself and I respectively UNTIL his invested financial assets are recovered and from there onwards, it would be 50/50 of net profit. With this proposal in mind, the company will be addressed to his name. Would this be fair overall as I would like to make it as fair as possible. Whilst I understand his investment, what he is bringing to the table, is quite an important one and therefore critical, I would like to think of my intellectual assets as just as important if not more.
How will the taxes and debt be dealt with in this partnership etc and its impact on shares...
Thank you so much for having a look. Your response will be greatly appreciated. Also, I would be grateful, though not a requirement, if you could state your (profession/position in academic field) in your response to this thread.
These things are often down to how each person feels. I don't think you need to put it in his name, he is an investor or part owner not the sole owner.
You're going to need to come to a agreement together. 60/40 until he regains his investment seems sensible.
My profession is not relevant to this topic but my other half is a director of many companies and I have seen him negotiate these a million times.
See a solicitor and work out an agreement. Once you do, then register it at Companies House.
You need to research what type of company suits you best. Whether you'll stick to a standard partnership or become a limited company.