Does my business partner have ownership in my company?

eventmagazineeventmagazine Posts: 1subscriber
I told a friend of mine that I was going to start a publication in another city.  He informed me he was moving there and would like to be a part of the new business.  I have the experience in publishing--he in sales.  I drew up an agreement that stated his duties and mine.  I told him this was not good timing for me because I was publishing a book that would keep me from concentrating on the magazine for some time.  He begged and assured me he would fill in until I could move there.  Well...you can guess what happened.  I set it up, put up the money, got loans to pay printers and worked with the designers and writers and advertisers after 8 months he claims he is 50% owner and took checks out of the post office box and created an new bank account and deposited the funds that were to pay the employees. I opened the original account and he was put on the signature card later.  The account he opened has the first name of the publication that most people put on their checks instead of the whole name that is registered to me. The company is a corporation in my name only with no stock issued to him. Is this stealing?? In the agreement, he was to get commission on sales and when the magazine was profitable, he would get 40% of net profits.  We just started having a little money left over to pay him over and above his commission and he is trying to take the company over.  The advertisers have a relationship with him more than me because he lives there and I do not.  I am so mad at myself for not being more careful.  I need advice.  My attorney says to sue him but it would cost over $10,000. Any ideas??
Thanks,Lois

Comments

  • SlowCookerMateSlowCookerMate Posts: 1subscriber
    I sounds like you have already consulted with an attorney.  It would probably be best to follow the attorney`s advice.
  • swanyswany Posts: 0subscriber
    Eventmagazine,
    Your story makes me sutter.  I have been running my own business for over 15 years and for the first time I am considering partnering with someone.  My business has grossed millions of dollares over the years and I have to be careful about how I set this agreement up.  I would like to put a performance based agreement together for him that can protect me if it doesn`t work, but of course motivates him to perform and keep performing.  Knowing what you do right now, do you have any suggestions on how to put this together?  Thanks for your time.
  • nuSenonuSeno Posts: 6subscriber

    Swany did you receive any information that was helpful to form your partnership?
     
    We @ nuSenO nutrition have spoken with a personal trainer to write an exercise and diet guide for our website. Here are the terms we agreed to " he would right the content before we post it on the website it would be reviewed by a professional writer where she would make any necessary changes. Once the guide it posted for sale on the website he would get a % of each sale". We are not paying him a salary nor his he a partner in the business. He has agreed to these terms.
    How can we create a legal document that would clearly explain the terms that we have both agreed on?
  • KirkThomasKirkThomas Posts: 0subscriber
    I know when I started my business that you always wanted to conserve the money.  But I recommend that you go ahead and have an attorney review all important contracts.  This is especially true if they regard employment or ownership.  
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