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I'd like to know the basics of how to structure a business…

Customer Question
I'd like to know the...
I'd like to know the basics of how to structure a business deal.
I'm a LP in a bar that just opened and am considering opening another one with one of the original partners. I'd get the money, he'd set everything up on the business end.
How might that work? Say the business was 50-50, I'd break off a percentage of profit for $xxx invested and reserve some for myself?
Just looking for general advice. Thanks.
Submitted: 3 years ago.Category: Business Law
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Answered in 19 minutes by:
5/27/2015
Business Lawyer: Law Educator, Esq., Attorney replied 3 years ago
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 125,306
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

You can do this several ways. The most secure way since you are coming up with the money is through making a loan to the new business and in this way you would be able to collect loan payments back until your loan is paid off and then you can share proceeds 50-50. The loan payments would be deductible to the business and also you could seek to take loan repayment on top of sharing the proceeds with the other owner 50-50.

Another way to do this is for you to take 60% and the other owner take 40% until such time you have recovered the total money of your investment and then at that time the percentage could be shared by partners 50-50.

Yet another way, you can seek the first XXX of the proceeds as repayment of your investment and then at that time your agreement can state that after you are given the first $XXX of net proceeds, then proceeds are divided 50-50.

In general, if you do the loan, that can be secured by you placing a lien on the equipment and business and in the event that the business fails, you could at least be first in line to recover your money before all other creditors. The other methods, you would not be able to recover your investment ahead of the other creditors and could end up with nothing if the business fails.
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Customer reply replied 3 years ago

OK thanks.

By the way I'm in the hair business. If you want your hair back let me know. If you want to keep shaving it they can put in 'microdots' that look like shaved hair so your shaved hair looks 'normal', like a full head of hair.

Been at this for 15 years so I know what works and what doesn't.

OK thanks again

Customer reply replied 3 years ago

I wanted to clarify something..when i said i'd come up with the money I meant I'd find other investors to fund the business not that I personally would come up with the money. How does that change things? Thanks again!

Business Lawyer: Law Educator, Esq., Attorney replied 3 years ago
Thank you for your reply.

I am sorry to say that my hair isn't coming back, unless I wear a hair hat (not enough of my own hair to move from one place to the other), tried that and it cost me too much for too little result.

If you have investors even better to structure it like a loan, so you can get investor payments on a schedule and those are deductible to the business and then you and your partner can split what is left of the net 50-50.
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Customer reply replied 3 years ago

ok thanks..

go to HISHairclinic.com

If you wear your hair buzzed they can make it all look like evened-out buzzed hair and improve the scar. I've seen it, very good. People fly in from all over just to do it. better than tattoos because they put the organic ink in top 2 layers of skin which 'traps' the ink and doesn't let it blob out.

If you decide you don't like it or want it removed they have a light that can remove the ink.

I work for Bosley but am agnostic in terms of helping people find something that works for them.

Business Lawyer: Law Educator, Esq., Attorney replied 3 years ago
Thank you for your reply.

I appreciate that. I'll look at that.

By the way, please do not forget to leave positive feedback, as the experts are not employees of this site and as such get no credit for spending time with customers unless the customer leaves positive feedback for the expert. Thank you.
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