From: albrecht@csd4.csd.uwm.edu (Chad Edward Albrecht)
Newsgroups: misc.entrepreneurs,misc.legal
Subject: Re: Seeking advice: Forming "partnership"/joint-venture.
Date: 16 Nov 1992 19:24:56 GMT
Organization: University of Wisconsin - Milwaukee
NNTP-Posting-Host: 129.89.7.4

shaver@convex.com (Dave Shaver) writes:
: My brother and some of his friends are going to start a business
: venture.  The basic facts are:
: 
: 	- There are three equal partners in this venture.
: 	- The business will involve raising then selling animals.
: 	- None of them has enough capital to fund the entire venture
: 	  himself.
: 	- The animals themselves, as well as the needed supplies and
: 	  pens/cages, will be located on the land of one of the
: 	  parters.  This partner will be primarily responsible for the
: 	  care of the animals.  The building of the pens and the
: 	  purchase of the animals is the main capital outlay involved
: 	  in this venture.
: 	- None of the parters has any significant business experience.
: 
: The advice I had for my brother was to get some sort of legal entity
: set up ASAP.  I saw many potential problems that could crop up down the
: road.  Some of the include:
: 
: 	- One or more of the parters wants to pull out of the venture
: 	  before the animals are old enough to sell.
: 	- The animals die and one or more partner doesn't want to try
: 	  again.
: 	- The parter who is caring for the animals on a daily basis
: 	  will feel he deserves more of the cut since he's doing more
: 	  work and the animals are housed on his land.
: 	- The parters will get to some impasse where they can't agree
: 	  in a friendly manner how some major business decision should
: 	  be made.
: 
: Does anyone have suggestions on what type of "partnership" they should
: set-up?  Do you have any suggestions on books which cover this
: subject?  My brother wants to keep it simple, but I told him to make
: sure it's all in writing.
: 
: I told him to figure out exactly what they wanted, then to visit a
: lawyer to write the final document.  I suggested at a minimum that the
: document should spell out:
: 
: 	- How much capital each parter will be putting in.
: 	- How profits and losses will be shared.
: 	- Who will be legally responsible for the animals should they
: 	  damage something or hurt someone.
: 	- What the terms and conditions for dissolving the partnership
: 	  will be.
: 	- What happens if one (or more) partner wants to get out
: 	  early.
: 	- Who retains ownership of the animals or the cages if the
: 	  partnership is resolved or it one of the partners leaves.
: 	- What happens if they run out of capital before they get any
: 	  profit to cover expenses.
: 	- That binding arbitration would be used to resolve disputes.
: 
: Any other suggestions of things to include?  I'll summarize and post.
: Thanks for your input!
: 
: /\  Dave Shaver
: \\  CONVEX Computer Corporation, Richardson, TX
: \/  Internet: shaver@convex.com    UUCP:  uunet!convex!shaver



Being involved in one business gone bad, I'm glad that I had the following:

	-legal partnership agreements stating:
				-amount of intitial investment
				-role performance
				-legal obligations
				-penalties
	-legal corporate stock in the company.
	-exactly 50% ownership
	-ledger of all APIC (additional paid in capitol)
	-CPA doing all the acounting work.
	-personally check the bank statements every month

I hope that these things help.  If you have any other questions, feel free
to E-mail me.
--
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