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TexLaw
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4024
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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Ive been working with my friend for the past 3 years building

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I've been working with my friend for the past 3 years building her business, our relationship has been very up and down and quite rockey lately due to discussion of partnership that was then dismissed from her side. She's married and her husband has worked up a rather significante debt that she is now also liable for. She now wants to start a sister company to the company we build, but in my name to secure it does not has to be split with her husband when she eventually gets her divorce. Her plan is that we will run that but someone else will co sign with me and she will run it in their place. How do I go about entering this new partnership without being screwed over. What's the procedure to protect my self?
Submitted: 2 years ago.
Category: Legal
Expert:  TexLaw replied 2 years ago.

Zachary D. Norris :

Hi,

Zachary D. Norris :

Thank you for your question, which I am reviewing. Please stand by

Zachary D. Norris :

Is the first business that you two opened up together incorporated?

Zachary D. Norris :

Also, what is it exactly which you need a co-signer for?

Expert:  TexLaw replied 2 years ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

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If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  TexLaw replied 2 years ago.
Hi,

Since I didn't hear back from you I switched over to the Q&A format. You will still be able to communicate with me.

Before I can answer your question, I need to know the following:

Is the first business that you two opened up together incorporated?

If so, what is your share?

Also, what is it exactly which you need a co-signer for in regard to the new business?

I look forward to hearing back from you.

-Zachary D. Norris
Customer: replied 2 years ago.

it would be a sister company, so oficially not part of it, but it would be a play on the name so we can expand on the same client base we already have.

I do not have any share or part of the current business, I thought i was working towards that but now she changed her mind, and as a solution the new venture was her suggestion.

The LLc would be in my name and the lease of the place would be in my name(with another co signer who would be a silent only on paper partner, and she would be the physical partner, just not legally.

Expert:  TexLaw replied 2 years ago.
If you are the sole member of the LLC, then you will be the legal owner of the business and this will insulate the business from your friend's potential divorce issues.

Once she gets her divorce, then you can bring her in as a new member of the LLC.

My understanding of what you are proposing is that the new LLC will essentially take over the operations of her old business.

As your friend will still want to be paid, you really need to have a contract in writing regarding this.

I would propose entering into a written agreement between the new LLC and your friend where she is an independent contractor who acts as a "consultant" and then you can pay her from the profits of the new LLC that way.

Please let me know if you have more questions.

Best Regards,
Zachary D. Norris
Customer: replied 2 years ago.

That was not what i was saying with the new LLC taking over the operations of the old company, however, Is that possible?

Is there any way that we can protect the old business from becoming half her husbands?

I case we do as you mention (new LLC taker over operations) can we protect our selves?

the actual question was how I protect my self from becoming part of their family drama by signing a company that's somewhat linked to the old company.

Expert:  TexLaw replied 2 years ago.
The answer to your question is: If your friend is not a member of the new LLC, then her husband can't touch it. That is how you keep him out of it. You are protected by being the owner of the LLC.

Your friend cannot have ownership of any of the new business on paper, otherwise it will become embroiled in the upcoming divorce. That is why I suggested the independent contractor consultant agreement for your friend.

As far as protecting the old business from a claim that it is marital property, the only way to do it is to transfer the ownership out of her name. That is why I suggest simply taking over it with the new LLC.

She would sell the "goodwill" of the old LLC to the new LLC in exchange for becoming an independent contractor and getting paid that way.

This should insulate the business and protect you from her husband's marital property claims. However, she cannot be protected from his claims. Everything she owns is going to be marital property unless she gets a divorce or he signs a separate property agreement.

I hope that cleared things up. Please let me know if you need further clarification.

Best Regards,
Zachary D. Norris
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4024
Experience: Lead trial/International commercial attorney licensed 11 yrs
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