Well today is the day that I have to be somewhere else. That means I need to get going somewhere or face serious fines and penaltys from the county. I am gonna have to wing it and use my own judgement on things and have it reviewed later I guess. I cannot afford lost income. That is the difference between my family eating and living in the dark without air conditioning.
I think that the arrangement sounds like a great opportunity for you. Fifty percent may seem like a lot but he is not only providing the property but also equipment and at least some business.
You might give some thought to negotiating upfront to buy him out at some point in the future. It's like a prenuptial agreement for a "marriage" of two business partners. In 34 years of practicing law, I have found that the lack of a buy-sell agreement is by far the greatest cause of disputes between partners, and usually the most expensive one.
Echoing Patrysha, forming a partnership is perhaps the biggest business decision a person can make. Make sure you get legal advice to set it up right and cover the sticky issues before they arise.
By the way, I can't address your county but in many cases when you are cited for a violation like that, if you can show that you are making progress you can get a short extension of 10 to 20 days to have everything properly set up.
On the other hand, as long as you don't put off dealing with the legal structure of your arrangement, you really aren't risking much. The problem is that once the emergency is over, it is easy to put off working out the details. I can't tell you how many times I have had clients who said that they would deal with the issues later but never got around to it until "later" became "too late." If you don't have the time or the money to do it right now, pick a specific date (say, November 1) and both of you commit to having your arrangement put in writing by that date.
Very good advice. I will talk with him and together we can come up with a date to get it all in writing. November actually would be kind of nice as it gives up some time to get to know each other and think about what will be most fair. There are lots of details to put in writing and I wouldn't mind a little time to see how things are gonna work there so I can decide what details I want on the contract.
From the way you describe this deal, I would say 50% sounds very sweet, indeed. I don't think splitting profit 50% for the real property only would be shabby, but to have all the major equipment as well, and an active customer list, that is great. (If my memory serves me well, this is exactly the sort of deal that gave JCPenny his start.)
Perhaps you are fearful of the "If it sounds too good to be true, it probably is" syndrome. Don't be. Sometimes we think a deal is too good to be true just because there are so many bad deals out there, we begin to accept bad deals as the norm.
Recommendations--
-- Follow David's advice, especially about a buy-out agreement, but make it a buyout dependent upon your choice. You don't want to find yourself forced into a buyout if you don't want to, in the future. You also want a time committment from you and from your partner - that the arrangement will continue for at least X years with a buy-back provision in case he wants to get out prematurely.
-- As generous as your partner is being to you, pay it forward by being as generous to your employees by making them profit-sharing. If you can get your employees to feel they are part of the business - that they 'own' the business - they will do things to make the business a success that you couldn't even thnk of to ask them.
Providence has provided you with a great opportunity. Make the most of it. Make yourself, your employees and your new partner boatloads of money!
Last edited by Spider; 07-30-2011 at 09:07 AM.
I have to agree with everyone. This does sound like a good deal, especially when you consider what happens if you don't take it. David has a good point about seeing if you can negotiate a buyout or at least have an option to purchase a greater % of the company. However everything you described sounds too good to pass up.
Seems like this is going to work out well and be exactly what you were looking for.
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