Need some HELP on business and extended family

[Eirinn]

Well, I had a huge post but for some reason I was kicked out... well I'll try to post it again...

About a year ago I started a venture with an in-law. We were both motivated, and I ended up coding and producing the online software for store, forum, custom applications, etc. I'm pretty much 99% done, and need to tweak a few things, but will probably take a small break. During this process I was able to get the forum up in a short amount of time. It was agreed upon from the beginning that everything would be a 50/50 proposition. Unfortunately, due to financial constraints on my in-law, they have only contributed about 10%, which is not a big deal as I acknowledged this sometime within the venture. It was specifically indicated that I would handle the technical aspects, specialty work that need to be contracted out, artist, etc. All they needed to do was post, cross post, drum up some advertisement, find distributers and manufacturers for products since they could not contribute financially but could "repay" in time devoted.

I started to notice that nothing was getting done, at least from what my in-law was supposed to do. We had several meetings and they reassured me that they would jump on it. Still things began to slump...

Finally, I asked my spouse to come with me for a meeting to try and motivate them (in-law is not a blood relative). My spouse basically acknowledged that they gave too many excuses and that if this had been a regular job they would have been fired - my in-law actually got pissed during this meeting. My inlaw actually acknowledged that they were bored, didn't have enough time, on and on. However, we left with all parties saying they would do what they were originally tasked to do. That is not happening.

I find out from my spouses nephew that my inlaw has been using his time for the past several months promoting a business related to another individual who is working with my inlaws child (want to keep this general as we are on the internet). I was actually quite hurt and upset. My spouses nephew said my inlaw was out advertising, etc for this other venture. I basically told my spouses nephew that I would probably be **** canning my inlaw as I was tired of all the ball and chain dragging. It was ironic that the following day, late at night, I get a call from my inlaw who was now chomping at the bit to get things done (coincidence?) - that lasted all of a couple of days, and things went back to nromal. In fact, the following day I removed the inlaw as Admin on the sites and all Admin access. I know they know what happened, but as of yet they still have not contacted me... not sure why?

I have now told my spouse that I will be paying the inlaw back what money they contributed and a little more for what time they invested. I have checked with some lawyer friends and they have indicated that since nothing was in writing there should be no problem. My spouse is now pissed at me! Especially since they found out that I asked a blood relative if they were interested - I should have used this blood relative initially as they are a go getter. My blood relative understands what needs to be done, is fine with a written contract, contributing, etc. and said that they needed a few days to think it over before they commit. I explained to my spouse that I really need help, and that who was I to get? Someone from the aether? I explained that my inlaw is not good at business, or seems not to be interested, but this does not mean we cannot still be friend and family.

At this point I will probably go over to my inlaws house this weekend, since my spouse will be away, and settle it financially and explain the situation.

What a mess! Can anyone suggest how to handle each of these parties? This has turned into a real pickle and I hate to upset anyone, but business is business, and if this is any indication of what it will be in the future I do not want it! I want to have my own business and a partner that give 120% like I do. I have way too much time and money invested to simply walk away from this "dream". Thoughts and comments would be appreciated!!!

[Spider]

...About a year ago I started a venture with an in-law. We were both motivated, and I ended up coding and producing the online software for store, forum, custom applications, etc. I'm pretty much 99% done, and need to tweak a few things, but will probably take a small break. During this process I was able to get the forum up in a short amount of time. It was agreed upon from the beginning that everything would be a 50/50 proposition. Unfortunately, due to financial constraints on my in-law, they have only contributed about 10%, which is not a big deal as I acknowledged this sometime within the venture. It was specifically indicated that I would handle the technical aspects, specialty work that need to be contracted out, artist, etc. All they needed to do was post, cross post, drum up some advertisement, find distributers and manufacturers for products since they could not contribute financially but could "repay" in time devoted.
.. I started to notice that nothing was getting done, at least from what my in-law was supposed to do. We had several meetings and they reassured me that they would jump on it. Still things began to slump...
.. Finally, I asked my spouse to come with me for a meeting to try and motivate them (in-law is not a blood relative). My spouse basically acknowledged that they gave too many excuses and that if this had been a regular job they would have been fired - my in-law actually got pissed during this meeting. My inlaw actually acknowledged that they were bored, didn't have enough time, on and on. However, we left with all parties saying they would do what they were originally tasked to do. That is not happening.
.. I find out from my spouses nephew that my inlaw has been using his time for the past several months promoting a business related to another individual who is working with my inlaws child (want to keep this general as we are on the internet). I was actually quite hurt and upset. My spouses nephew said my inlaw was out advertising, etc for this other venture. I basically told my spouses nephew that I would probably be **** canning my inlaw as I was tired of all the ball and chain dragging. It was ironic that the following day, late at night, I get a call from my inlaw who was now chomping at the bit to get things done (coincidence?) - that lasted all of a couple of days, and things went back to nromal. In fact, the following day I removed the inlaw as Admin on the sites and all Admin access. I know they know what happened, but as of yet they still have not contacted me... not sure why?
.. I have now told my spouse that I will be paying the inlaw back what money they contributed and a little more for what time they invested. I have checked with some lawyer friends and they have indicated that since nothing was in writing there should be no problem. My spouse is now pissed at me! Especially since they found out that I asked a blood relative if they were interested - I should have used this blood relative initially as they are a go getter. My blood relative understands what needs to be done, is fine with a written contract, contributing, etc. and said that they needed a few days to think it over before they commit. I explained to my spouse that I really need help, and that who was I to get? Someone from the aether? I explained that my inlaw is not good at business, or seems not to be interested, but this does not mean we cannot still be friend and family.
.. At this point I will probably go over to my inlaws house this weekend, since my spouse will be away, and settle it financially and explain the situation.
.. What a mess! Can anyone suggest how to handle each of these parties? This has turned into a real pickle and I hate to upset anyone, but business is business, and if this is any indication of what it will be in the future I do not want it! I want to have my own business and a partner that give 120% like I do. I have way too much time and money invested to simply walk away from this "dream". Thoughts and comments would be appreciated!!!To start with - take a deep breath. From what I can tell from your description, this isn't nearly as bad as you seem to think. It's hardly a mess, and not what I would call a pickle.

1) I do not think it wise to get "hurt and upset" by what your partner has been doing - it is not pertinent. You are only entitled to concern yourself with what he has not been doing regarding your business. Drop the "hurt and upset" - it's not productive.

2. Re: paying back your partner's earlier investment, this should be done only with their agreement. Whether you like their performance or not, you confirm that they are partners and you should treat them as such. Perhaps they would like to get out of the partnership, but if you challenge them or provoke them, they could resist that just to be awkward. It's not wise cause that.

3. As for "canning" your partners, you cannot do that. One partner cannot "fire" another partner. You are partners. The most you can do is walk away from the partnership, but you have already indicated that you do not want to do that. Making moves in an attempt to "fire" them will only make matters worse for yourself. It sounds to me that they have found other interests and would possibly welcome a sensible approach to their withdrawal from the partnership.

4. I disagree with your "lawyer friends" - the fact that nothing is in writing does not mean a contract does not exist. You and your partner have been acting in such a way that an implied contract exists. The difficulty - if push comes to shove - is that no-one knows the terms of this implied contract and the courts will determine. You don't want to go there. Careful negotiations are far better and less costly.

5. I think you are unwise to be talking with a"replacement" partner (your blood-relative.) Drop that liaison and do not let it become part of your discussions with your current partner. You can go back to it if the current partnership is dissolved, but not before.

6. I think visiting your inlaws while your wife is away is a bad move. You will alienate your wife by appearing to go behind her back and you give up a trusted ally.

7. I think - from what you have said - this is a small blip in the road. If you never have any worse problems than this in your business career, you will be extremely lucky and quite rare! Figure out what's best for them and you will likely find that that is also best for you. Congenial, caring discussion will bring out the needs of each party and a satisfactory outcome seems likely. This is far from being a catastrophe.

[vangogh]

I have checked with some lawyer friends and they have indicated that since nothing was in writing there should be no problem.

Does this mean you haven't legally formed a partnership? Has the business been registered in any way? You did accept money though, which might be considered a verbal contract.

There are really two issues here. One being the family and one being the business. Unfortunately when family go into business together it can be hard to separate the two as feelings about one cross over to the other.

First thing you have to decide is whether or not you think it's still possible to stay in business with your in-laws. It sounds like you no longer think it can work, but consider it again taking all the feelings out of it. If you do still want to work it out then talk to them with that objective. Talk to them about what you've contributed so far and what they've contributed and talk about how to make sure both sides are putting in a fair amount. Maybe the solution is a split other than 50/50. Set some specific tasks that need to be completed along with a specific timeframe in which they need to be completed. Set out the responsibilities for each party, determine what's a fair split of the business based on those responsibilities, and then set timeframes in which things need to be done.

If you decide you can't work with them then you need to figure out the best way to dissolve the business. Even if there is no paperwork and there's no legal entity to this business it's possible you did enter into a verbal contract. More importantly though these are your in-laws and they're going to be in your life so working things out amicably is the best idea. If you don't think it can work explain to them why you don't think it can work anymore. Stay calm and try to keep all emotion out of it. Ask them what they think fair to dissolve the business. Maybe they'll be happy being compensated like you're currently planning. If they want more then present your offer and negotiate. Again don't let emotions get in the way. You're probably better giving them more than you want in order to go your separate ways in the business while still being able to keep the personal relationship.

Hope something in there helps. I know it's a tough situation you find yourself in, but try your best to keep emotions out of it and find a reasonable solution no matter whether you want to give the business another chance or go your separate ways.

[Eirinn]

Does this mean you haven't legally formed a partnership? Has the business been registered in any way? You did accept money though, which might be considered a verbal contract.

There are really two issues here. One being the family and one being the business. Unfortunately when family go into business together it can be hard to separate the two as feelings about one cross over to the other.

First thing you have to decide is whether or not you think it's still possible to stay in business with your in-laws. It sounds like you no longer think it can work, but consider it again taking all the feelings out of it. If you do still want to work it out then talk to them with that objective. Talk to them about what you've contributed so far and what they've contributed and talk about how to make sure both sides are putting in a fair amount. Maybe the solution is a split other than 50/50. Set some specific tasks that need to be completed along with a specific timeframe in which they need to be completed. Set out the responsibilities for each party, determine what's a fair split of the business based on those responsibilities, and then set timeframes in which things need to be done.

If you decide you can't work with them then you need to figure out the best way to dissolve the business. Even if there is no paperwork and there's no legal entity to this business it's possible you did enter into a verbal contract. More importantly though these are your in-laws and they're going to be in your life so working things out amicably is the best idea. If you don't think it can work explain to them why you don't think it can work anymore. Stay calm and try to keep all emotion out of it. Ask them what they think fair to dissolve the business. Maybe they'll be happy being compensated like you're currently planning. If they want more then present your offer and negotiate. Again don't let emotions get in the way. You're probably better giving them more than you want in order to go your separate ways in the business while still being able to keep the personal relationship.

Hope something in there helps. I know it's a tough situation you find yourself in, but try your best to keep emotions out of it and find a reasonable solution no matter whether you want to give the business another chance or go your separate ways.



Absolutely NOTHING exists in writing. In fact all aspects of the server/site/domain, artist renderings, work agreements, everything is in my name. I should not have indicated that emotion is getting the better of me. I try to view life as a logical challenge. However, after weighing everything out it is hard not to feel some sort of disgust, especially after I have sat down with the inlaw several times, and nothing is getting done - I do not know how to spell it out any differently, nothing as in nothing has been accomplished from what they were supposed to do as per our meetings. My spouse wants to sit down one more time with them and basically spell it completely out, with this being the final accessment if nothing is accomplished as per our agreement. The attorneys who I have contacted (friends) indicated that since nothing was done in writing nothing is bound per se, even if it went as far as legal proceedings, which I can guarentee it will not, the verbal agreement made was that I would do a specific task(s) and the inlaw would do a specific task(s) at a minimum it is a breach. I don't want to handle this as a douche, so I may take my spouses advice and sit down and have a heart to heart talk with the inlaw, I may bring up the solution, with money in hand, that they can simply walk away. I agree that bringing someone in at this stage was foolish, I should have reasoned better. This I will have to deal with, though I know no hard feelings will be present as my blood relative knows what I am going through. On a side note, I know that my spouses blood relative - bound to the inlaw, has indicated that we should go our seperate ways, and that they acknowledge that nothing is being done by said inlaw. I was suprised to hear this, so I'm not sure if there is talk on the other side of the isle, so to speak...

Emotions aside, I just do not see things progressing with the other party. The work ethic is simply not there, nor is the "gusto"/drive to get things done. Thaks again for the advice, I will keep it in mind when we sit down and talk. Any other suggestions, or input? Thanks again!

[vangogh]

It didn't sound like you thought things could still work out, but I figured it was worth mentioning. I think the main thing is to talk to you in-law in a way that doesn't lead to bad feelings in the family. Even though you know to keep family and business separate it can be hard to talk about one without bringing in the other.

I do understand how you feel about all this.

It's up to you whether you want to offer your in-law one more chance like your wife is suggesting. It might actually be a way to end the business arrangement. You can offer your side and get your in-law to agree to one more chance if certain tasks are completed by such and such date. Based on what you've been saying it's unlikely those tasks would be completed and you'd have your out that probably wouldn't upset anyone in the family. Of course the tasks could be completed which you'd have to be prepared for.

Mostly just sit down with everyone and talk this through as best you can without hurting anyone's feelings to the point where it upsets your personal relationships with everyone.

[Eirinn]

Well I am torn between giving them one more shot and throwing in the towel. Nice person, just not reliable in this instance and others (though I don't think it would be appropriate to mix the two, though it does have some overall bearing). Reason, though, is telling me that if nothing has been done to this point, what chance is there for the motivational drive to kick in at this stage? Lots to think about. Thanks again!

[tylerhutchinson]

If it were me I would pay them back and then a little extra and call it a day. It seems like they do little contribution so they are not an asset in a business sense. I would be respectful as possible since they are family, but I would cut them out of it.

[vangogh]

Realistically there probably isn't a chance the motivation will suddenly quick, though it's always possible it will. I would think another chance would be more to help family relations than anything else. Still it's always possible one more time is what it will take to get your in-law moving.

[Eirinn]

Well against my better judgment my spouse wanted me to offer my inlaw another chance. It was agreed upon (by my wife and I) that this would be the FINAL/LAST chance (more so to keep our understanding with each other and no hard feelings since blood is involved), which was passed onto the inlaw. At first the inlaw was kind of pissed, made excuses, etc. and I basically said I was tired of the excuses, and if they felt that they had too many obligations in life to fulfill this one, I would understand (I was really trying to make a way out for them). Indicated that we can still be friends, family, etc. and that maybe business was no their thing. They indicated that they were still interested (even though it slipped out that their other venture with their child was waning - maybe this was the root of the new found interest?) and would do their part as originally agreed upon. I will give this one last shot, to keep the peace, and perhaps someone here can help me with what type of verbiage needs to be used (should deadlines be used?) in conjunction with the agreed upon tasks that they need to fulfill, with a caveat that if they do not fulfill said obligations then they are out. Any help would be greatly appreciated! Thanks again!!

[Business Attorney]

The clearer you can say it the better, but keep in mind that more verbiage is often not better. When you try to spell out every detail, you will always leave something out. It never fails. You are better off describing it conceptually and then putting in a few specifics.

Yes, there should be timetables. If things are open-ended, you will never know whether the action items will ever be finished.

You also need to spell out the consequences more than just "they are out." When and how do you give their investment back (or do you)? Is it over time? If so, do they get interest? Is it payable only out of the business or do you have to pay it even if the business fails?

Also, if they do stay in, you really need to do the same things with ongoing obligations, not just the start up activities. The types of issues you have now do not get better when you get over the initial hump.

[greenoak]

i would get out as fast as possible...it sounds impossible...
. and try and be more careful and slower to pick your next partner..partnerships are so hard even wilth great planning and thought and cooperation....
.good luck!!!

[Eirinn]

Great advice Business Attorney. I plan on drafting up a plan with your suggestions in mind. Should I focus on a long term plan that encompasses the current issues at hand or focus on a short term plan that addresses the issues, while working on a long term draft?

Greenoak, I hear you. This is a bad situation and I plan on laying everything on the table. If it all goes to sh!t, I will walk away while requesting that I maintain the domain, they can keep the logo (will just have to have a new logo commissioned). All other art work is maintained and owned in the hands of a third party (whom I trust with my life) and is "loaned" to the "company". Besides that, there really is nothing else. No assets, etc.

[Spider]

Oh, dear! It looks like you are determined to make a confrontation out of a simple matter - and you seem to be making a good job of it!

Have you considered what would be the best outcome for them? All I am hearing is what *you* want. Have you even asked them what they want?

[Eirinn]

Actually Spider I am not determined to make a confrontation. It has been one week since we last talked and still nothing has been done. I really am at my wits end. I have asked them what they want and they said they want it to be successful. However, how can that be without hard work? They indicated that they have been reading the "secret", not sure what that is, but that they believe if they put some good vibes out into the aether that it returns 1000 fold. I don't know what to make of this, since I agree that you have to be positive, but you also have to do SOMETHING to initiate the ultimate goal. If life was that simple no one would try anything to be successful. I do want it to work out, but then again I hate feeling like the "dad" who constantly has to tell their child to take the trash out, make their bed, pick up their clothes, etc. when it should be something they do without be constantly told.

[vangogh]

I think you need to talk specifics with them. Agree to what needs to be done and put a time frame on when it needs to be done. Work out something to pay them back or whatever is required to dissolve the partnership if the agreed to tasks aren't completed. Otherwise it's going to be more of the same. You wanting to get this business going and them not doing anything.

If that doesn't work start a another business on your own. You mentioned they're working on other projects there shouldn't be an issue with you doing the same. I know you'd rather not have to build another site after all the work you've done, but it should go quicker this time around as you'd be able to reuse much of what you've already done and you'd have an opportunity to correct mistakes along the way.

[greenoak]

eirinn...the secret...o dear!!! ..... they arent ready for this.... its good to be open and positive but its good to save yourself before you are deep into a bad situation too...
hopefully if you get out now you can still be friends with them...

[Eirinn]

Thank you for all the assistance. Well, it has been almost two weeks and nothing agreed upon has been done. I have spoken to my spouse and she sees it. Will give one more week for good measure and then call the whole thing off, pay them what they brought to the table and some extra. They really have too many "pokers" in the fire and need to focus on one thing...

[vangogh]

Maybe the talks haven't led to anything constructive with the in-laws but having your wife see it is a big thing. That was probably one of the issues causing you the most worry. With her on your side it'll be much easier to dissolve the partnership. It does sound like your in-laws are mainly focused on other projects right now and simply don't have time to work with you at the moment.

[Eirinn]

:sigh: Sat down with the wifey, and came up with a tangible "Action Plan" that outlines in easy to read bullets what is required of the in-law on a week over week basis, with Sat for report compilation and Sunday for a "business" meeting. Spent quite a bit of time on this and actually made two versions - one has contract language before, and after, requiring signatures with any breech terminating the agreement and payout of funds invested with a little bit more. The other one is basically the same detailed "Action Plan" but with no contract verbiage.

So, thinking everything was smoothed out, I presented it (action plan without contract verbiage) to the in-law this past Friday. They read it, and I answered some questions, and they immediately started in on where was my action plan, and that it was way too much to do, and that they have a "real" job and work outside 8 hours and are not a "paper pusher" like myself (I actually have a professional job and am far from being a paper pusher, but whatever...). I reiterated that the plan was something I did before I left the office on Friday (had some time available) and simply constructed it to assist them with providing a focal point where to start some of the duties.

The following day, after they had some time to read it over, I again visited them at home. I was met with the same tone as the night prior - how they work full time, yadda, yadda... I explained that I have been busting my ass in coding the entire site for close to a year, working with contractors on work, design artists, paying the contractors, and basically staying up until 1:00 am every night. I really did not see the reason in why I had to justify my existence...

It almost seems like they are not happy with the duties given to them and want something "exciting" for lack of a better word.

At this point I will see where we stand next Sunday when the meeting is held. I will present my reports, and what I have done during the week, as outlined in their action plan. I hope they follow likewise. I need some additional thoughts on this one:

If for some reason I show up to the meeting with all my sheets in hand, and they do not have anything, or have not fulfilled the action plan, or at best made a marginal attempt, do I nix the arrangement on the spot or fall back on the action plan that spells out the contract in detail, get them to sign, and offer one last chance??? What a colossal pain in the ass this has been. It’s like pulling hens teeth... oh, and by the way, they have not done a damn thing in over three weeks from when we addressed the previous failure to do anything - wherein I was told they would make some marked improvements.

[Spider]

... I need some additional thoughts on this one:
If for some reason I show up to the meeting with all my sheets in hand, and they do not have anything, or have not fulfilled the action plan, or at best made a marginal attempt, do I nix the arrangement on the spot or fall back on the action plan that spells out the contract in detail, get them to sign, and offer one last chance??? What a colossal pain in the ass this has been. It’s like pulling hens teeth... oh, and by the way, they have not done a damn thing in over three weeks from when we addressed the previous failure to do anything - wherein I was told they would make some marked improvements.It is sad to watch you turn a molehill into a mountain and cause yourself so much stress along the way. The one thing you did right was to get your wife on board - I think you did a good job of involving her and not bypass her, as you originally intended. Just going on your description, I feel this has reached a point-of-no-return. You feel it, I'm sure your wife feels it (although she probably wants to save it for the sake of family harmony,) and I'll bet your inlaw/partner feels it, too.

Your next meeting should be calm and friendly - no recriminations, no arguments, no accusations. No mention need be made to the Action Plan - that's dead. Forget it! Should never have been written, in my opinion. I'm sure you will know whether they have done anything, and you have explained to us how much you expect them to have done. Do not discuss what they have or have not done, nor what promises they did or did not make.

As simply and as quietly as you can, explain that the project has reached a point where full-time involvement of everyone involved is now needed. You are grateful for the contribution they (your inlaw/partner) has made but it is clear that they are unable to quit what they are currently doing to work on your project full-time. You know their heart has not been in the project and you are really thankful that they have persevered and done what they could.

Explain that the project now needs to become a proper company to provide the service and products to customers that will start to generate revenue. Ask them how much they have contributed financially - agree on a figure - let's say it is $3,000. Agree on how much money you have put in (and anyone else, if they have) - let's say that is $10,000.

Now ask how much time they feel they have contributed - don't argue but try to agree on a number of weeks or hours (be generous.) Do the same for yourself and try to reach a figure you both find reasonable. Let's suppose you both agree on 300 hours for him and 2,000 hours for you.

Ask for his approval to formalize the business by creating a registered joint stock company, initial sharholdings to be calculated as follows--

1. Each hour worked by each of you for the creation so far will be valued at $12/hour - for him $3,600 - for you $24,000. Add the financial contributions you both have made - gives a total $6,600 by him and $34,000 by you.
2. Do the same calculation for anyone else who has helped, either by working for no pay and/or investing money.
3. Register the joint stock company and make an initial share distribution at $10 per share of 660 shares to your inlaw and 3,400 shares to yourself and however many shares to anyone else who has invested time or money into this venture.

Of course, you will re-work those numbers to suit the actual figures of your particular case.

What this does is to put yourself officially in the commanding situation, giving you controlling votes of the shareholders. You can then vote yourself CEO. You have paid back your inlaw with an asset that will increase in value and - if you are successful - could be worth a considerable sum in the future, at no out-of-pocket cost to yourself right now.

Hurt feelings, awkward situations, family problems and other negative aspects of this affair will have been washed away, and everyone will have saved "face." And you will be free of your partner, in control of your future and on the road to riches and success.

I also suggest you give a token shareholding to anyone and everyone who has helped you so far, and especially a larger-than-token shareholding to your wife for putting up with all the crap of the past few weeks!

Good luck!

[Eirinn]

It is sad to watch you turn a molehill into a mountain and cause yourself so much stress along the way. The one thing you did right was to get your wife on board - I think you did a good job of involving her and not bypass her, as you originally intended. Just going on your description, I feel this has reached a point-of-no-return. You feel it, I'm sure your wife feels it (although she probably wants to save it for the sake of family harmony,) and I'll bet your inlaw/partner feels it, too.

Your next meeting should be calm and friendly - no recriminations, no arguments, no accusations. No mention need be made to the Action Plan - that's dead. Forget it! Should never have been written, in my opinion. I'm sure you will know whether they have done anything, and you have explained to us how much you expect them to have done. Do not discuss what they have or have not done, nor what promises they did or did not make.

As simply and as quietly as you can, explain that the project has reached a point where full-time involvement of everyone involved is now needed. You are grateful for the contribution they (your inlaw/partner) has made but it is clear that they are unable to quit what they are currently doing to work on your project full-time. You know their heart has not been in the project and you are really thankful that they have persevered and done what they could.

Explain that the project now needs to become a proper company to provide the service and products to customers that will start to generate revenue. Ask them how much they have contributed financially - agree on a figure - let's say it is $3,000. Agree on how much money you have put in (and anyone else, if they have) - let's say that is $10,000.

Now ask how much time they feel they have contributed - don't argue but try to agree on a number of weeks or hours (be generous.) Do the same for yourself and try to reach a figure you both find reasonable. Let's suppose you both agree on 300 hours for him and 2,000 hours for you.

Ask for his approval to formalize the business by creating a registered joint stock company, initial sharholdings to be calculated as follows--

1. Each hour worked by each of you for the creation so far will be valued at $12/hour - for him $3,600 - for you $24,000. Add the financial contributions you both have made - gives a total $6,600 by him and $34,000 by you.
2. Do the same calculation for anyone else who has helped, either by working for no pay and/or investing money.
3. Register the joint stock company and make an initial share distribution at $10 per share of 660 shares to your inlaw and 3,400 shares to yourself and however many shares to anyone else who has invested time or money into this venture.

Of course, you will re-work those numbers to suit the actual figures of your particular case.

What this does is to put yourself officially in the commanding situation, giving you controlling votes of the shareholders. You can then vote yourself CEO. You have paid back your inlaw with an asset that will increase in value and - if you are successful - could be worth a considerable sum in the future, at no out-of-pocket cost to yourself right now.

Hurt feelings, awkward situations, family problems and other negative aspects of this affair will have been washed away, and everyone will have saved "face." And you will be free of your partner, in control of your future and on the road to riches and success.

I also suggest you give a token shareholding to anyone and everyone who has helped you so far, and especially a larger-than-token shareholding to your wife for putting up with all the crap of the past few weeks!

Good luck!



I appreciate your thoughts. I don't really think I turned a molehill into a mountain - this is my first time doing a business, and expected everyone to be at it 100%. I know everyone is different, and maybe some are not motivated, per se. In any case I'm sure all will be fine, just looking for some ideas etc. Thanks again!

[Spider]

Good. I've given you some ideas. I hope everything works out for you.

[vangogh]

Sorry this isn't working out as well as you'd like Eirinn. From everything you've said it doesn't really sound like your in-laws are that interested in contributing to the business. I think it would be a good idea to ask them how much they feel they've contributed like Frederick mentioned, but not to figure out how to structure the company. I think you'll be happier in the long run paying them back whatever they feel like they deserve back and working the business on your own. You sound more committed to this business than they do and I get the sense that anything you try to do to get them to be as committed to it as you is only going to lead to more frustration.

For the sake of family let them tell you what they think they've contributed and assuming it's reasonable accept their number. It's not worth fighting over a little bit of money.

However I think you're going to be happier and the business better off if you turn the partnership into a sole proprietorship. Just think how much could have been done on the business in the 4 weeks or so since you started this thread.

[Spider]

... I think it would be a good idea to ask them how much they feel they've contributed like Frederick mentioned, but not to figure out how to structure the company. I think you'll be happier in the long run paying them back whatever they feel like they deserve back and working the business on your own. You sound more committed to this business than they do and I get the sense that anything you try to do to get them to be as committed to it as you is only going to lead to more frustration.
For the sake of family let them tell you what they think they've contributed and assuming it's reasonable accept their number. It's not worth fighting over a little bit of money...The trouble with paying them back now - and the reason I do not recommend it now - is, that cuts them out and will be seen as both a personal rejection and a grab to keep the business for yourself. If the offer had been made earlier, as I suggested then, you might have saved all this, but it is too late now. You will be cast as 'the bad guy' to try to pay them off at this stage.

I think you accomplish the same thing by re-creating the "partnership" within the confines of a joint stock company, but leaving them with no power and nothing to do. Remember, your only complaint throughout this thread is that they have not done what you feel they should have done. Doing as I suggest here will solve that problem entirely and still leave you as 'the good guy' looking out for their future. It will also leave you totally in control to run the company as you see fit - an effective sole proprietorship, with a board of directors (which you control.)

[vangogh]

I can understand that. It's a tough issue because family is involved. It just hasn't come across to me like the in-laws here have any real interest in working on the business so I have a hard time seeing how the business is going to move forward with them being a part of it. That's why I was thinking your idea to have them decide what they've contributed and to buy them out at their price would keep peace in the family.

I get the feeling the in-laws won't be happy with the shares of the company. They won't see the direct connection to the value each part has contributed even if they have just agreed to what their value was. They'll just see how little shares they're getting in a company they probably now think is 50% theirs.

[Spider]

I can understand that. It's a tough issue because family is involved. It just hasn't come across to me like the in-laws here have any real interest in working on the business so I have a hard time seeing how the business is going to move forward with them being a part of it. That's why I was thinking your idea to have them decide what they've contributed and to buy them out at their price would keep peace in the family... I think we are both considering this with one eye on the rest of the family - that is correct, we must do that, because how the rest of the family take it can have repercussions years down the line. It is also one of the rare occasions that "business" and "company" cannot be used interchangably. My suggestion has the inlaw/partner as a member of the company but having no part to play in the business. See what I mean? That mean the business can go ahead without them because they are not part of the business, they are only part of the company (as shareholders.)



... I get the feeling the in-laws won't be happy with the shares of the company. They won't see the direct connection to the value each part has contributed even if they have just agreed to what their value was. They'll just see how little shares they're getting in a company they probably now think is 50% theirs.That is a grave possibility. If they (the inlaw/partner) wants to be bought out, that would be a good solution. I have deduced that while this may have been possible earlier, it is less likely now. I fear the inlaw/partner has been pushed so much to do what they promised they have been made to feel so much part of the company and to take a buy-out at this stage would seem like they have been pushed out. If that is a false deduction, and a buy-out is acceptable to them, then go for it. But the family needs to be clear that it was their choice, not forced on them by Eirinn.

[vangogh]

Yeah I think much of the issue here is the family and naturally wanting to keep peace in the family. I think your idea is an interesting one. You and I naturally don't know the entire situation so it's hard for either of us to know how the in-laws or Eirinn will react to things. Something is telling me that the in-laws aren't interested in taking an active role in the business. I also get the feeling Eirinn isn't going to be happy doing all the work and having to send some money to the in-laws. Maybe that's wrong and he'll be fine helping them out. They are his in-laws after all.

I don't get the feeling the in-laws feel like they've been pushed and will dig in to stay with the company. It's possible they feel that way, but the impression I'm getting is they invested in the business and that's the extent of their interest. Because there's already been so much conflict I think for the sake of family peace the best thing is to not be involved together.

[Spider]

... the impression I'm getting is they invested in the business and that's the extent of their interest. Because there's already been so much conflict I think for the sake of family peace the best thing is to not be involved together.Using the same set of incomplete data, I lean towards feeling that they did invest in the very beginning and to be "bought out," "let go," "pushed out," or some other unfriendly term will bubble to the surface and sour relations for a long time into the future. I think family peace can best be preserved by letting them share in the future success of the company as minority shareholders, getting dividend payments in due course, for their help (little though it may have been) in the very beginning, without being involved in the day-to-day running of the business.

In the end, it all depends on the parties involved. I hope our discourse get Eirinn's creative juices flowing so he can work out a solution that everyone with a stake finds satisfactory.

[Eirinn]

Using the same set of incomplete data, I lean towards feeling that they did invest in the very beginning and to be "bought out," "let go," "pushed out," or some other unfriendly term will bubble to the surface and sour relations for a long time into the future. I think family peace can best be preserved by letting them share in the future success of the company as minority shareholders, getting dividend payments in due course, for their help (little though it may have been) in the very beginning, without being involved in the day-to-day running of the business.

In the end, it all depends on the parties involved. I hope our discourse get Eirinn's creative juices flowing so he can work out a solution that everyone with a stake finds satisfactory.



Thanks again everyone. The only contribution from the outset was about $200.00 (actually a little less), and maybe 20hrs of "work". In the time it has been up and running I have literally devoted over a thousand hours, if not more, coding, programming, etc. and have put in several thousand dollars. I'm really not looking at being a dick in the situation. I just want to see some progress as agreed upon from the outset. I actually did an action plan last Friday in an effort to rekindle some fire and help them focus on concrete duties, but as of today, still nothing has been done (action plan responsibilities were written in such a way that I would be able to track some of the duties). I just don't know.

I really want this to work, but every time I ask them what the problem is or what is holding them back I get 180 degree excuses that in my opinion are not even relevant. On top of that, as mentioned in a previous post, I sat down and talked to them about some of the items listed that they should have no problem doing and I was met with quasi aggression and innuendos about how I don't really work, and that they have a "real" job and therefore cannot do some of the tasks presented. Its just a strange situation... I want to be fair, and keep the peace, and in all honesty if the inlaw actually made an effort I would reconsider keeping them, its just that everything has come to a standstill... thanks again for the help.

[vangogh]

From everything you've said I don't see how your in-laws really want to be part of this business. I think for the sake of both the business and the family it's going to be best to work this business on your own. I'd give them $500, which is their initial $200 + 20 hours at $15/hr, to have them agree to the business being yours.

Given what you've told us trying to get them to work on this with you is only holding back the business. If you want the business to move forward you're going to have to go it without them. The $500 is to help keep family peace. It doesn't even sound like they consider this a business they partly own.

[Eirinn]

From everything you've said I don't see how your in-laws really want to be part of this business. I think for the sake of both the business and the family it's going to be best to work this business on your own. I'd give them $500, which is their initial $200 + 20 hours at $15/hr, to have them agree to the business being yours.

Given what you've told us trying to get them to work on this with you is only holding back the business. If you want the business to move forward you're going to have to go it without them. The $500 is to help keep family peace. It doesn't even sound like they consider this a business they partly own.



That sounds fair. Thanks. I was just going over my IP log, and it was far worse than I expected. They maybe have looked at the site less than a dozen times over the course of three months. I need to bring this to a conclusion that does not offend wither party. I appreciate your suggestion and will use them. Thanks again. Should I get into signing paperwork type stuff, or will this add fuel to the fire? I was thinking a verbal agreement with money payout that satisifes both partys, with a couple of unbiased witnesses present.

[Eirinn]

It doesn't even sound like they consider this a business they partly own.

Thats the thing. When talking with him or listening to him talk to others he always refers to it as HIS business, even when in his presence, its never OUR business. so I'm not sure what he is thinking...

[vangogh]

Does he think you work for him then? It's hard to understand how he can think it's his business when he's never willing to work on it.

You said you never signed any paperwork to enter into the partnership so I wouldn't think you'd need any to get out of it. If he hasn't done anything more than contribute $200 and spend a few hours total at the site it's hard to see how any court would conclude he's an equal partner. I think if you paid him back they're no way they could conclude he's any part of the business.

The issue to me is more one of family and mainly with your wife. You naturally don't want to upset her as it's her family. I think as long as you do something she considers fair you'll be ok. Maybe talk to her about wanting to push this business forward and see what she thinks about giving your in-laws $500 or so. If she's fine with it then I'd talk to them and give them the money and then you can put your energy into the business instead of having to put it into this situation.