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Found an Investor/ Partner but now we need a contract -HELP!

elsizzle2000elsizzle2000 subscriber Posts: 5
edited February 2007 in Business Planning
So the good news is I found an investor/ partner. The stressing news is we need to come up with a partnership contract. Neither of us have done contracts before & we have no idea what to put in them. I am looking for a trustworthy contract lawyer who can help us decide what to put in the contract & then draft it. One concern off the bat I have is that we decided that I would have 51% & he would have %49. I made this decision because I decided that he should have an equal part of the profits because he will be an active participant & will bring a lot of to the table. I kept the 1% for myself so I would have the controlling interest. Meaning when it came to decision making I would have the final say. This seems fair to me. He said that he doesn`t want me to have the last say. He wants us to be equal in the decision making. Well this doesn`t make sense to me. I feel like we will be going in circles. Also the business is solely my idea. He brought a few ideas to the table when he became invlolved but nothing that I would not have come up with in due time & nothing that really changes the core of the business. Although he is putting up all the money for it. I would say from $25-$50K. Should I expect to have 51% given the situation? Doesn`t eh person with the larger percentage holder have final say or controlling interest? How does this usually work? What should I do?
elsizzle20002007-2-12 20:3:36
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    stonesledgestonesledge subscriber Posts: 608 Silver Level Member
    I always suggest the expertise of an attorney in this situation. atleast if not to create contracts but to look over what you have drawn up to make sure both parties are in a fair partnership and all the details are laid out.
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    onlineeateronlineeater subscriber Posts: 16
    Agreed call a lawyer. A lawyer can help you draw up the contract but he can not work the business issues out. I am afraid this is something that you will still need to settle with your investor. 
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    elsizzle2000elsizzle2000 subscriber Posts: 5
    I would need the advising of some sort of business consultant though so I know what actually goes into contracts. I would like to know if it is standard that the person who holds more percentage of the company has the last say or controlling interest. I need to know this before I talk with my partner/ investor so I know what I am talking about.
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    pepperlegalpepperlegal subscriber Posts: 2 Member
    I`ve worked this different ways with my clients.  In most situations, the individual with the controlling interest would break a tie, but I`ve also drafted agreements whereby certain types of decisions can be made by different partners.  In other situations, I`ve included a neutral third party to ask as the binding tie-breaker.  Whatever you decide, I do strongly recommend having an attorney draft a partnership agreement outlining each of the partners` rights, which will save you big headaches down the road.
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    elsizzle2000elsizzle2000 subscriber Posts: 5
    thanks pepper. so that answers my question - in every situation it is different. I will be looking for an attorney then...
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    patentandtrademarkpatentandtrademark subscriber Posts: 103
    Make sure to address the question of intellectual property in the matter.
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