I am starting a webhost with a partner who is out of country
(I Canada, He USA).

What measures should i take to make sure that i get my fair share.
For example, if the payments go to him, i want to make damn sure that one day all my access wont be cut off,, and that i never recieve my share.

What are all the measures i shoudl take?
What should i be sure to do, and not to do?

Thanks!
:D

Don't let him know what the root password is. ;)

Doesn't sound like a person you should partner with.. try picking your partners for a business very carefully.... our partnership works on trust and we also pass each other the financial reports on everything... and every month at the end I send my partner who is in another country the financial report.

Why do you want to partner someone from another country.
Pick a local so you can talk to him face to face.

Originally posted by FindSP.Com
Doesn't sound like a person you should partner with..


No, i do trust him, but i want to know what i should do to be 100% secure.
We get along jsut fine, and have great ideas together.


I'm wondering what other people in my situation have done to keep keep both people happy, and to secure themselves.

Originally posted by Palm
Why do you want to partner someone from another country.
Pick a local so you can talk to him face to face.


It is EXTREMELY hard to find a local in my area to partner with.

Its not so much that i want a partner in another country, but we have been exchanging quite a few emails and work well together.

Thanks for the intput.

Can we ask what kind of "partnership" you're talking about??

Are you laying down large chucks of cash; supply many unpaid man-hours; investing your servers or something?

We are starting a hosting company together.
50-50%

Overall..it seems like he has more vested into it (His Dedicated Server, that he pays for)... ETC.

Overall i think we will both invest equal money into this.


But we will work together (the two of us) and get a hosting company off the ground, and run it.

I speak from words of experience on this one.


Paperwork Paperwork and MORE paperwork....

It may seem like a burden or a non-issue at the moment.... but I've been in way 2 many partnerships with people both in and out of the US and have gotten screwed on them as well... the #1 thing I forgot.. was having a lawyer draw up an internationally binding contract for both ownership %'s , business filings and who gets what and who's responsible for what......

If your extremly serious about doing this, then definately speak with a lawyer and have the necessary papers drawn up....

After all, you don't want him saying *screw you* and locking you out of the servers, and he doesn't want you saying the same thing and stealing all of the customers away.....

I've learned over many years that partnerships are to be taken very seriously... no matter how good of friends you may be.... its a business not a friendship, and without a good foundation to stabalize you when things get tuff , your bound to fall apart.... I know I did..... althou ..... well I won't bore you with what my partner did :)


But, take my advice, get the paperwork drawn up if your serious about it..... or else you'll have nothing to protect you should things go arwy....... international lawsuites are already expensive enough... but not having any paperwork would make going after him should he attempt to screw you, almost impossible.

Good advice, Daniel.

I'm in a similar position too. I'm in Australia whereas he's in Canada. Now that's far! :stickout

Though I will be moving to the states sometime next year hopefully. :)

Originally posted by Jonathan K.
Good advice, Daniel.
I'm in a similar position too. I'm in Australia whereas he's in Canada. Now that's far! :stickout
Though I will be moving to the states sometime next year hopefully. :)

Does that mean that you are in partnership now; or that you are considering a partnership??

Does that mean that you are in partnership now; or that you are considering a partnership??

I mean I'm in the process of entering into a partnership with a good friend whom I've met online and known a couple of years.

He's already registered our trade name in Canada. We're now in the process of selecting whether to colo or go dedicated or something else. Also in the works of getting a merchant account. Already have a few accounts waiting for us to get started so have been doing lots of research. :)

Originally posted by Jonathan K.
I mean I'm in the process of entering into a partnership with a good friend whom I've met online and known a couple of years.

Did you have a lawyer draw up some type of contract?
Or, do you just have a verbal agreement?

I'm just trying to establish usefull information for RunOfTheMill ;) and anyone else reading this thread.
This is a good subject.

Read what Daniel posted and follow the very good advice. nice post Danny-boy!

(Ohh and tangent: Chicken Jr. ETA 2 months :D)

Did you have a lawyer draw up some type of contract?
Or, do you just have a verbal agreement?

Although some might not agree with the path I'm taking, I think it needs to be dealt with on a case-by-case basis.

Currently, what we have now is only a verbal agreement that everything we're involved in will be split 50/50. Got another friend to provide some funding for us to get started. No papers there either and although we had insisted on it, the investor didn't want to hear anything of it.

I guess honesty and trust is rather important in business. Without either, sooner or later, something will happen which might prove disastrous to one's business. I agreed with Daniel's post and although I might be contradicting myself by going down the other path of choosing not to involve a lawyer at this point, I believe we will have something drawn up eventually to protect both of us.

Originally posted by Chicken
(Ohh and tangent: Chicken Jr. ETA 2 months :D)

Hen or rooster?? Or, don't we know?

<<MOD NOTE: Micro Rooster>>

Would incorporating a company in US, then draw a clearline on % of shares, profits, etc do anything better ? Does this case need some international legal bindings?

Originally posted by Chicken
(Ohh and tangent: Chicken Jr. ETA 2 months :D)

OT: Congratulations! I wish you much fun!

Originally posted by Jonathan K.
Currently, what we have now is only a verbal agreement that everything we're involved in will be split 50/50.
I guess honesty and trust is rather important in business.

You are right, honesty and trust is very important. No one should do business with someone which he doesn't trust 100%. But we are no little children 3 years old, so nearly everyone

has met a person which he initially trusted but later found out that this trust was not founded
or there were some miscommunication and each one went his own way.


If you don't want to bother a lawyer do the paperwork yourself!

Its hard to handle business when your partners is good than you are.
To have a good partner, find a partner that does not good to what you know and vise versa.

Like if you are a programmer and not good in marketing... look for partner with marketing skills.. so you will be dependent to each other. :D

Originally posted by Walter


If you don't want to bother a lawyer do the paperwork yourself!

Well, since we're a start-up, trying to keep costs down to a min. Has anyone got a template which they might care to share? Or perhaps know of some place where I can do research. :)

Compromising Photos :D

Originally posted by ckizer
Compromising Photos :D
HAHA...
:D :D :D

Several people have posted about the need to enter into a legal partnership agreement, so I will just say ditto and move on.

If you are worried about financial shenanigans, then you might want to consider having your financial statements regularly audited and/or outsourcing the accounting. This will place a neutral third party into the relationship that both of you can interact with.

I was in a small manufacturing business with some now former friends about five years ago, and we paid an accounting firm something like $75 to $100 a month to keep an extra set of books so that our investors could see exactly how much money we were losing.

Man, talk about bad memories.

But you could also consider an outside accounting firm for reasons other than fraud, if neither you or your partner have strong backgrounds in finance.