- Original Poster
- #1
A business partner and myself are setting up a new venture. We each separately own limited companies. My partners existing company has more trading history in the sector in which we will be operating. It would be advantageous from a sales point of view to play on the trading history of his company while we are selling the new product.
From a speed and cost perspective it would also be advantageous to first sell the product through his company as everything like accounts, VAT registration, etc are all up and running.
Should the venture be successful after a few sales we would spin-off the "division" of his company into a new limited company. If it proved unsuccessful then it would be lot easier to shut-down than if we'd formed a new company.
The question is how we could show (and protect) my interest in this new venture. My partner doesn't want to give me a shareholding of his company as I'd then get dividends from the whole company rather than just the new venture. I could however become a non-shareholding director.
From reading about the options I'm thinking a joint venture agreement might be the way to go. It could show our respective investments in the venture and have a fixed time frame after which we'd either spin-off or shut-down.
I'd be interested to hear your thoughts.
From a speed and cost perspective it would also be advantageous to first sell the product through his company as everything like accounts, VAT registration, etc are all up and running.
Should the venture be successful after a few sales we would spin-off the "division" of his company into a new limited company. If it proved unsuccessful then it would be lot easier to shut-down than if we'd formed a new company.
The question is how we could show (and protect) my interest in this new venture. My partner doesn't want to give me a shareholding of his company as I'd then get dividends from the whole company rather than just the new venture. I could however become a non-shareholding director.
From reading about the options I'm thinking a joint venture agreement might be the way to go. It could show our respective investments in the venture and have a fixed time frame after which we'd either spin-off or shut-down.
I'd be interested to hear your thoughts.
