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Attorney_Joseph
Attorney_Joseph, Attorney
Category: Business Law
Satisfied Customers: 7279
Experience:  I am a private practitioner handling criminal and civil matters for my clients.
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A year ago, a friend of mine and I started developing a business

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A year ago, a friend of mine and I started developing a business idea. I was the leader in the venture and created the business model, many of the programs and spent the majority of the time. On several occasions I asked to get a written contract knowing that I might want to do this business on my own at some point, and since my partner kept saying he wasn't sure he was "in", I kept going with research and development investing time, money in the venture. Now it appears I may want to actually start the business on my own. We'd like to draw up a contract that clarifies my intent and agree on what he should get from having been a part of the development. How do you determine what is a fair percentage?
Submitted: 3 years ago.
Category: Business Law
Expert:  Attorney_Joseph replied 3 years ago.

The percentage can really be whatever you jointly deem to be appropriate. In many situations, one owner will be solely responsible for the finances while the other will be solely responsible for the actual work. In such a scenario, the parties might agree that these aspects are equally important and therefore make the percentages 50/50.

 

In your situation, it sounds like you may be contributing a greater portion than your partner. If this is the case, you might consider the percentage of the contribution of each of you and then use that number to determine the profit for each of you as well.

 

 

Also, several customers have asked how they may direct a question to me in particular. If you specifically want me to assist you in your legal matter, just put "FOR JOSEPH" in the subject line and I will gladly pick up the question as soon as I am on-line.

Customer: replied 3 years ago.
He has not invested any money and in my eyes, has contributed approximately 15-20% of the development. He tends to "think about the venture" more than actually "taking action on it" and it doesn't appear that he wants to be a part of the business, just wants to get money if its successful. Legally, does he have a "right" to a financial part of the busienss even if he doesn't want to be a part of it?
Expert:  Attorney_Joseph replied 3 years ago.

Sorry for the delay, I was engaged in some 4th of July activities. At any rate...

 

If he contributed in anyway, then he certainly has a claim to financial gain should the venture prove profitable. If you saw the movie Social Network or even know the story of Facebook, that might give you some idea as to what might occur. In that situation, two brothers claimed that they gave the founder of Facebook the idea for the social website. When the founder gave them no money, the brothers sued. They ultimately received millions of dollars.

 

My point being, if he was involved at all, and you state that he was, then you would be wise to ensure that he receives some compensation.

 

 

Also, several customers have asked how they may direct a question to me in particular. If you specifically want me to assist you in your legal matter, just put "FOR JOSEPH" in the subject line and I will gladly pick up the question as soon as I am on-line.

Attorney_Joseph, Attorney
Category: Business Law
Satisfied Customers: 7279
Experience: I am a private practitioner handling criminal and civil matters for my clients.
Attorney_Joseph and 6 other Business Law Specialists are ready to help you
Expert:  Attorney_Joseph replied 3 years ago.

I am going off-line for the evening. Please feel free to respond, if necessary, and know that I will be back on-line tomorrow.

 

Thank you for your patience.

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