QUESTION.
I started a company and a lady that has been working for me as a sub-contractor now wants to buy into the company. She is in the U.S. in a different state than myself and has an HB1 visa. She is also not a qualified investor. How could I structure the agreement to give her a small peace of the company? Thank you very much!
ANSWER.
You don't mention whether your company is incorporated or not. If it is incorporated then you can simply issue her shares. If you are an LLC, then you can write up an operations agreement (very similar to a partnership agreement) and the document will spell out what partnership interest she will own and how profits will be shared. If you are not a corporation or an LLC, then you should become one. If you are going to bring in new owners, and maybe get rid of them, I recommend the corporation route.
Bringing in a "partner" is not like bringing in an investor. The securities laws do not apply to bringing in a "partner." They are written to protect investors. So don't worry about whether this person is or is not a qualified investor.
The same thoughts you would go through if you were forming your company should pass through your head now as you grow. It's all about choice of legal entity and drafting the documents properly so things work well now and they will continue to work well in the future if one of you decides to leave the company.
I recommend you do some studying on the subject and/or hire an attorney for consultation. As a SCORE counselor I am a business coach. I am not a free alternative to hiring legal counsel. See
LEARN A LITTLE ABOUT CHOICE OF LEGAL ENTITY, and consider getting a copy of Michele Cagan's book. See STRUCTURING YOUR BUSINESS.
I've given you a few things to think about. Feel free to send me follow-on questions via email. Good luck! Regards, -Jeff
Jeff Lippincott
SCORE.org Counselor
Princeton, NJ
scoreprinceton @ aol.com
www.scoreprinceton.org
www.jlippin.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment