Business Law

Ask a Business Lawyer. Get Business Law Questions Answered ASAP.

Ask a Lawyer,
Get an Answer ASAP!

Business Law

I have a question about business partnership

Customer Question
i have a question about business partnership
Submitted: 3 months ago.Category: Business Law
Ask Your Own Business Law Question
Answered in 5 minutes by:
9/6/2017
Business Lawyer: Richard, Attorney replied 3 months ago
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55,874
Experience: 32 years of experience practicing law and a businessman.
Verified

Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

Ask Your Own Business Law Question
Business Lawyer: Richard, Attorney replied 3 months ago

Good evening. What's your question?

Ask Your Own Business Law Question
Customer reply replied 3 months ago
I started a software services business over 10 years ago. I had a good client (and a friend) who referred me a few projects here and there and continued to do so over several years. Due to our good service and retention, we have kept clients for many many years in the past 10 years. What we did over the years as his referral business grew, we started paying him 15% referral fee. At the same time he also mentored the business. I owned the business 100%. Around 3 years ago, that friend/client asked to be included as a business partner at 33%. He said his contribution is sweat equity and that he is contributed in form of referrals and mentoring. I have trusted him and accepted his partnership without negotiation. He is a seasoned executive and i see his value. We are still a small business. He suggested a 6k management fee besides the yearly distribution. Since i was 100% owner before, i never drew any management fee. However, i started drawing 8k for myself considering the cash flow and we take 33/67 distribution at the end of the year. This is my fulltime business, however, he is involved in other businesses as well.I definitely see his value and contribution. However, i do not know if the partnership structure we have today is correct as i at the time of forming a partnership, i did not have enough understanding of the partnership structure and also i would have asked him for advice but he was a party in this situation and i trusted him. If i had an option, i would have negotiated the percentage. Secondly, the management fee we draw, i do not know if there is a formula or standard. For example, with his 6k and my 8k, i do not know if after 33/67 distribution, this is a balanced partnership. I trust him as a partner and i know he is very committed, but i know there is definitely business interest of his own as well. I just want to share this with an expert and get an opinion. And if i feel this is slightly unbalanced, i need to someone tell me if i am right or wrong. Also what are my rights as majority partner.
Business Lawyer: Richard, Attorney replied 3 months ago

Thanks for responding. I don't really have enough facts to provide a complete and accurate assessment. Therefore, I am going to opt out to open your question up to all experts so another expert can hopefully timely provide you the information you seek. Please do not respond to this post as it will only slow the process of such an expert picking up your question. Take care.

Ask Your Own Business Law Question
Business Lawyer: Damien Bosco, Attorney replied 3 months ago
Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 3,178
Experience: Helping you with your legal questions.
Verified

Do you have a written partnership agreement now?

Ask Your Own Business Law Question
Customer reply replied 3 months ago
Business Lawyer: Damien Bosco, Attorney replied 3 months ago

If you are referring to an operating agreement, that implies this is a limited liability corporation. Is that correct?

Ask Your Own Business Law Question
Customer reply replied 3 months ago
that is correct.
Business Lawyer: Damien Bosco, Attorney replied 3 months ago

Now without going into details or specifics, it sounds like you want to change the terms of the operating agreement. Have you discussed this with the other member(s).

Ask Your Own Business Law Question
Customer reply replied 3 months ago
Well... not at this point as i don't want to propose this big change. However, can i decide to take higher management fee i decide? For example, current management fee is lower in a sense it lowers my % of $$ out of the company. Since i am majority owner, it would be my decision to change this? To be fair, i would think the management fee should be representation of the ownership %. For the last three years, i have taken lower % of management fee hence in numbers bringing down my personal dollar gain from the company to 60%. I just want to do what is justified. Also if i decided to take over more of company ownership, will i have to pay? Since he did not provide any dollar contribution. I know we are still good friends but i cannot discuss these matters with him and want to get an outside opinion.
Business Lawyer: Damien Bosco, Attorney replied 3 months ago

You want to take a higher management fee. Is that set forth in the operating agreement now? You as the majority owner could probably change this but if the other person disagrees, then that could cause some strife. If you want to have more of a majority ownership, the other member would have to agree and there could be a payment to that effect. If you put in the money and he did not, you would have in the operating agreement that you would be paid back your money before other distributions. We can discuss more if you want to do so.

Ask Your Own Business Law Question
Business Lawyer: Damien Bosco, Attorney replied 3 months ago

Hello: I am following up to see if you still need further help. If so, please let me know. If you are satisfied with your answer, please provide a positive rating between 3 and 5 stars so you can pay me for the service I provided to you. Best regards.

Ask Your Own Business Law Question
Ask Damien Bosco Your Own Question
Damien Bosco
Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 3,178
3,178 Satisfied Customers
Experience: Helping you with your legal questions.

Damien Bosco is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Attorney

1,823 satisfied customers

Experienced lawyer

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

1,611 satisfied customers

Run my own successful business/contract law practice.

MShore Law

MShore Law

Attorney

1,233 satisfied customers

Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements

RGMacEsq

RGMacEsq

Attorney

750 satisfied customers

Licensed Texas General Practice Attorney

Barrister

Barrister

Attorney

643 satisfied customers

17 years practicing attorney, JD, BA, MBA

Ely

Ely

Attorney

573 satisfied customers

Counselor at Law.

J.Hazelbaker

J.Hazelbaker

Attorney

393 satisfied customers

Experienced and trained in the area of business law.

< Previous | Next >

Related Business Law Questions
I want to create an operating agreement for an existing LLC
I want to create an operating agreement for an existing LLC in Ketchikan, Alaska. This LLC is principally involved in cultivating cannabis and manufacturing cannabis products. This LLC is a legal and … read more
WiseOwl58
WiseOwl58
JD Honors Graduate
3,633 satisfied customers
I have a question in regards to a small business my wife and
I have a question in regards ***** ***** small business my wife and I are looking into starting. We would like to get some insight on some of the legal issues we'd have to get covered for this busines… read more
WiseOwl58
WiseOwl58
JD Honors Graduate
3,633 satisfied customers
We have a small business - professional services - as a
We have a small business - professional services - as a partnership LLC between two partners. Do you have an example of an "operating agreement" for such a business? we need a template so we can fill … read more
Ray
Ray
Lawyer
Doctoral Degree
30,530 satisfied customers
I own a small business. My question is about a somewhat
I own a small business. My question is about a somewhat different way to pay a bill owed by my business. Can my business assign all rights to an account receivable that is owed TO my business by anoth… read more
JPEsq
JPEsq
Attorney
Doctoral Degree
5,086 satisfied customers
I own a small business and am being attacked and harassed by
Hi I own a small business and am being attacked and harassed by a group of people, who through social media Facebook are posting my personal office number and address, plus today posted a newspaper ar… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I am in a Partnership LLC in PA and my business partner has
I am in a Partnership LLC in PA and my business partner has never paid me her share of the initial purchase of inventory as I paid for it on my personal credit card. Since she has never paid if it her… read more
LegalGems
LegalGems
Juris Doctorate
10,423 satisfied customers
Our small business is being sued in small claims court in
Our small business is being sued in small claims court in Los Angeles Cal. for $5000. by our ex sales rep. who we informed Jan. of this year that we could no longer afford his services unless he would… read more
J.Hazelbaker
J.Hazelbaker
Attorney
Doctoral Degree
393 satisfied customers
I recently applied for a small business loan. The lender is
I recently applied for a small business loan. The lender is affiliated with and funded by the U.S. Department of Housing & Urban Development and a partner of the U.S. Small Business Administration, U.… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
We are selling a small business and need the paperwork done
We are selling a small business and need the paperwork done for taking a note on it and other items pertaining to the sale. What type attorney should I be looking for? … read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I have a small business in Mass. I purschased the bussiness
I have a small business in Mass . I purschased the bussiness in 2009 and paid the previous off in 2015. She has moved to Fl and is using my company name can that happen? … read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,823 satisfied customers
Im a (non-involved) part owner of a small business in
im a (non-involved) part owner of a small business in Georia. I was offered and paid money to sell my shares to my nephew. My partners lawyers wrote and states due to the corporate bylaws the sale is … read more
Roger
Roger
Litigation Attorney
Doctoral Degree
26,822 satisfied customers
I am negotiation legislation for a group of small businesses
I am negotiation legislation for a group of small businesses with a state agency. The agency is asking our industry for a price to provide a service we currently do not provide. To avoid federal and s… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I'm working on starting a small business, and have had
I'm working on starting a small business, and have had mentoring sessions with a non-for-profit organization. The mentors there took notes for my business about markets, customers etc. for those sessi… read more
RGMacEsq
RGMacEsq
Attorney
Doctoral Degree
750 satisfied customers
Closed a small business but my bank won't close the business
Closed a small business but my bank won't close the business account without a dissolution "confirmation". What is the confirmation? A letter? A form?… read more
Ray
Ray
Lawyer
Doctoral Degree
30,530 satisfied customers
IS A "C" CORPORATION REQUIRED TO HAVE AN OPERATING AGREEMENT
IS A "C" CORPORATION REQUIRED TO HAVE AN OPERATING AGREEMENT WITH ITS SHAREHOLDERS OR OFFICERS?… read more
Richard
Richard
Attorney
55,874 satisfied customers
Are there any legal funds to support small business owners
Are there any legal funds to support small business owners especially female small business owners? I heard legal aids programs usually support consumers instead of small business owners. Thanks.… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I own a small business partnership, Need to define laws to
I own a small business partnership, Need to define laws to dissolve it. … read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I am currently a small business owner of a corporation in
I am currently a small business owner of a corporation in California. I would like to add another business(bar) to my corporation, but I would need 2 or 3 investors to help inject capital(cash) into t… read more
Jim Williams
Jim Williams
Juris Doctorate
6 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x