Advice needed

[collins585]

Hi everyone,

I hope you can help me.

My business partner and I set-up www.eadm.co.uk about a year ago. We have grown slowly but consistently in that time, which has been great, especially as we both hold full-time jobs.

I will be quitting my full-time job in 2 months time to take the company to the next level (hopefully!!!). My business partner will not be doing the same and will therefore continue to work for his current employer.

I will obviously need to take a small salary to cover my costs. Do you think my business partner should be entitled to take a salary as well? He will need to do extra work (outside his office hours).

In terms of company profits, how should they be shared? 50/50?

Any advice will be gratefully received.

Thanks,
CJ

 

[Kent Accountant]

Before you do anything, you and your colleague should enter into a shareholders' agreement and directors' service contracts. These will spell out how and what salaries are to be paid, your respective responsibilities and how profits will be shared.

Speak to Antonia, a member here

Do it now. It isn't something that should be left for later

 

[KM-Tiger]

Do it now. It isn't something that should be left for later

Seconded. If you don't it's likely to bite you really badly much later on.

 

[collins585]

Thanks guys, very useful. I have sent a message to Antonia.

In your opinion and if you were in my situation, do you think my business partner should take a salary? and what ratio of profits would be fair?

 

[JohnG]

[it] may not sound important now but it could be incredibly important in years to come, getting it resolved early will prevent future headaches.

That's the key bit of advice!

I've known several partnerships where it all seemed sweetness and light at first - maybe even for several years - but eventually each partner wanted to go a different way and that's when the trouble started.

Get Antonia to sort you out a watertight agreement before you both go any further.