Partnership split
I'm developer. I had an idea for a company, came up with a name and everything, and decided to bring in a business development partner. The responsibilities for him were: 1. do business operations, sales, and marketing & of course split up the costs.
The small corporation is under my name completely. My contribution in time and effort is significantly higher than his, 90% to 10%. In terms of money I've spent $25,000 while he spent $3,000 on it. And of course we didn't see any sales from him.
The product still isn't ready, and of course we didn't make any money.
Since it is not working out with us, what is the best and fair way to let him go? I don't want to screw anybody, but neither do I want to be screwed myself ;)
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You would better be off with an attorney advice on this. – Littleadv 12 years ago
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@Joey - when you say the business is under your name completely, does that mean your partner has not been given any shares in the company? What type of corporation is this? Do you have something registered, did you form an LLP, are you and LLC, or did you go the Corp route (C or S)? I'm assuming this is in the US? – Madd Hacker 12 years ago
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It is LLC, and on the documents - no – Joey Stieben 12 years ago
2 Answers
I would recommend the same as NetTecture answers.
Return he the money, the $3,000 initial investment and try to find an arrangement with he ( a written one, just in case).
Based on the initial capital he owns 10% of the business IF he some how figures as a partner in any document of the business.
You can of course scare him with splitting the losses of the business :) that may put he out or perhaps he start to do his part on the business.
The only serious advice is talk to a lawyer
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What would be a great arrangement? ) – Joey Stieben 12 years ago
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@JoeyStieben It depends what do you want :) Generally speaking a "great arrangement" is done when all parts are happy. :) – User983248 12 years ago
Talk a lawyer.
Depending on jurisdiction you may have donated him 50% of the business out of pure stupituty - at least in one country I know a non-formal partnership defaults to every partner having the same ownership.
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And that country is? – Joey Stieben 12 years ago
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Germany. WHen you form a GBR (partnership under vcivil law= both parties are fully liable for any debts of the partnership, and the partnership is equally split. BOTH parts can be overridden by contract, but that is the default. – Net Tecture 12 years ago
