How To Structure This Partnership?
Hi all,
so how would I structure a deal if someone is willing to provide the cash for a downpayment, etc and I'd be managing the place?
Let's say that to close on a 170k 2 fam is about 15k. (incls downpayment, etc)
Let's say gross rents are 2200 and profit is about 900/mo.
So his responsibility is soley for the downpayment and closing costs.
What do u think?
Thanks
-Ariel
The Uniform Partnership Act defines a partnership as “an association of two or more persons to carry on as co-owners of a business for profit.” Although not required by law, you may have to submit written Articles of Partnership. This would apply, for instance, if you wanted to open a company bank account. These articles would define the contributions made by the partners to the business—financial, managerial, material, or other. They would also define the roles of each partner in the business relationship. All articles should be filed with your secretary of state.
A partnership differs from a corporation in terms of the limited life of the partnership, the unlimited liability of at least one of the partners, the co-ownership of the assets, mutual agency, share of management, and share in partnership profits.
If there is no written agreement, the duties and responsibilities of partners are equal, which may not be what you want.
Your partnership agreement should cover
The amount of money each partner brings into the partnership.
How the profits will be divided.
The different roles and responsibilities of each partner.
The requirements to provide financial reports.
The rights of partners to draw on bank accounts.
How partners can leave the partnership and the consequences of this.
What happens when the business is sold?
How disputes are handled.
The salaries.
The rights of departing partners to start a similar business, etc.
When it comes to forming partnerships my best suggestion would be to seek legal council. I would also suggest never partnership on a 50/50 ratio, but a 51/50 as a minimum so that you are able to control
[addsig]
Wow. Thanks!
And monetarily, what would you think woud be fair? Since I'm doing all the leg work, would be 75/25? 80/20?
Thanks
-Ariel