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Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 2345
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I am starting a new Corporation with a partner, in which I

Customer Question

I am starting a new Corporation with a partner, in which I am funding the company. The company is going to pay me back from our profits, a few hundred dollars a month. What sort of agreement would you suggest I use in doing this? and is there any sort of template you may suggest? I'm not looking to spend a bunch of money on an attorney as It is not a considerable amount of money. Thanks in advance
Submitted: 3 months ago.
Category: Business Law
Expert:  Damien Bosco replied 3 months ago.

Hello and Welcome! My name is***** am a licensed attorney. I have assisted hundreds of others with their legal questions. I am happy to help you!

Expert:  Damien Bosco replied 3 months ago.

Is the company an S corporation or an LLC?

Customer: replied 3 months ago.

Hello, It's a S corporation not an LLC

Expert:  Damien Bosco replied 3 months ago.

Thanks for the additional information. You would want to draft a sharesholders agreement. You could find copies on line. An attorney would usually look at three different ones and draft one for your particular needs. If you want to draft it yourself, you would do the same thing. All shareholders agreements are different, so it is best to look at at least three to make sure the one you want is good for you company. Feel free to ask follow up questions.

Customer: replied 3 months ago.

Thanks for that, but isn't a shareholder agreement different than some sort of note for funding the entity? or are you suggesting I incorporate the two together?

Expert:  Damien Bosco replied 3 months ago.

Hello again. Yes. The shareholders agreement is all encompassing; it includes many different terms including , funding arrangements, profit distribution, buy sell terms. Sometimes people refer to the individual terms as agreements, but when drafting it is all in one in most cases.

Customer: replied 3 months ago.

Ok, However, we already have a shareholder agreement, what should I use as a separate document for the funding of this Corp ? or would it be best just to do an addendum?

Expert:  Damien Bosco replied 3 months ago.

James: If you go with a separate agreement you have to make sure that there is nothing in the shareholders agreement contradicting the terms of the funding agreement. I would attempt to keep it all together.

Expert:  Damien Bosco replied 3 months ago.

James: You should always check with your accountant about any tax implications regarding unequal sharing of profits in an s-corporation. If you have further questions, let me know. Best of luck.

Expert:  Damien Bosco replied 3 months ago.

Lastly, you may want to consider a promissory note structure if you are lending the company money and getting paid from the profits.

Customer: replied 3 months ago.

Ok, it sounds like that would be my best bet which is to do a promissory note.

Expert:  Damien Bosco replied 3 months ago.

Yes it does. Glad we worked this through. Good luck.

Expert:  Damien Bosco replied 3 months ago.

James: Do you have any further questions? - Damien

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