New estate agency business

[Namdlo33]

Hi I’m setting up a new business in estate agency - just want some advice on how to structure it best
My investor has exsisting letting business I will go into this office set up and run sales - no office rent charged just our expenses and then they will pass any leads from landlords looking to sell.
He wants 45% share is this reasonable
I presume I should also include a wage as well as 55% share of profits as I will Be the one working and running the sales business
Any advice opinions etc would be most helpful
Thank you

 

[Scalloway]

See answers here

https://www.ukbusinessforums.co.uk/threads/new-business-structure-set-up-advice.396348/

 

[MJ Holohan]

1. Without knowing all the details I would say. Set up a limited company between you and him with shareholdings as per your post.

2. Agree on how much both of you will charge for time and services provided to the business. This should include your wage for time spent. He might also be due a wage for time he or his staff spend working on the business. You might want to consider recharging rent as this would be tax efficient and also reflect the true cost of running the business. Ditto for leads passed on to the business.

3. Dividends from profits after all of these costs are charged would then be paid out in line with the above shareholdings.

The above is the fairest way to split costs and ownership. You might want to revisit the 45% if the business pays him directly for rent and the leads but might be a more transparent way to set things up.

 

[Namdlo33]

Thank you - the rent is not charged as such as they already have the office and it’s an incentive I guess for going into business with them - also no water or electric is paid but it’s not a huge amount total no more than 10k a year
The leads they pass are not paid for - however it all goes in the pot for turnover then they get their 45% of total net profit for the business as a dividend
What are your thoughts - any further advice

 

[MJ Holohan]

Next step would be to analyse some of the numbers to see the best way to structure it for you. Could save you alot of money in the long run. Then we would set up a limited company. Let me know if you want any help.

 

[Namdlo33]

Yes please that sounds good do you have an email I can take