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  1. #1

    10 partners in a company?

    I'm in the midst of working towards a launch for a website. Part of my strategy was to get 10-15 friends from uni to work x hours according to a plan in promo'ing the site.

    My idea was to give each of this friend a very small percent of the company(an incorporation). How small? .1%-.2%

    My question is how much of a mess am I getting into as far as restructuring the ownership of my company?

    I know...I should get professional advice from a lawyer. And I will when time comes. I'm merely trying to grasp some idea of what factors/complexities I will have to open myself up to to have really 10 more owners to the company in addition to me and my partner.

    Appreciate any help.

  2. #2
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    Setup a board of directors
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  3. #3
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    Well obviously when it comes to making decisions, you are going to have to consult with all 10 people before doing anything major.

  4. #4
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    Quote Originally Posted by MikeWalczak
    Well obviously when it comes to making decisions, you are going to have to consult with all 10 people before doing anything major.
    Not really, if he uses money as a common currency (ie instead of time worked he takes the value of labor * hours) and assigns ownership based on financial investment out of total investment by all partners he only needs to convince majority ownership to get his projects going which may only require consulting with 5 or less people.

  5. #5
    I really doubt it. It seems like there are different types of stocks I could give people - one kind being the kind not holding any decision-making power.

  6. #6
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    Quote Originally Posted by oonth
    . . . I'm merely trying to grasp some idea of what factors/complexities I will have to open myself up to to have really 10 more owners to the company in addition to me and my partner.
    The main complexity there is that you have "10 more owners to the company in addition to me and my partner".
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  7. #7
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    I would give them ranks. Mostly likely making yourself the highest ranking. I would say only keep the only people that are important to the business. But the percent is going to be hard. It all depends on how much you will make. If you are making little money. They will mostly want a higher percentage. But if plan on making alot of money. You can give them a lower percentage depending on what they are doing.

  8. #8
    Quote Originally Posted by mohamoud
    I would give them ranks. Mostly likely making yourself the highest ranking. I would say only keep the only people that are important to the business. But the percent is going to be hard. It all depends on how much you will make. If you are making little money. They will mostly want a higher percentage. But if plan on making alot of money. You can give them a lower percentage depending on what they are doing.
    Ranking makes sense but what's the legal equivelent of it, anyone?

    As for %, you're right it'll be a hardsell. But sheesh, these are buddies who have two options at hand: 1) help me promo my site and 2) help me promo my site & get a rare shot at making some money someday. Knowing that my offer's not that bad

  9. #9
    It can be troublesome if you have more business knowledge then the rest, because all decisions will need to pass through them as well, and they may disagree (based on poor business knowledge).

    I always prefer a solo job, or 1 partner that is knowledgeable and a team-worker.

  10. #10
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    Partners.
    Ha, unless they're a female and you put a ring on their finger: It rarely ever works out as intended.

    And rarely would even in the ring situation -- she'll soon teach you whose boss!

    Don't do it. If you have a product or project that you think will succeed: Push harder, collectively you will not get anything more done than you are now.

    Partnerships have the potential to give you additional tools. The problem is that in most cases the tool is the partner.
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  11. #11
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    If he use stocks, they're shareholders and not really partners where they actually get a say in how the company is run. As long as he maintain a 51% share in the company there isn't anything they can do. All they get is dividends from the stock (if any).
    Sarcasm, the 6th Ponyman of the Apocalypse.
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  12. #12
    Great point Fluffy.

    Shareholders, not partners...gotta remember that

  13. #13
    Quote Originally Posted by oonth
    Great point Fluffy.

    Shareholders, not partners...gotta remember that
    corporation not partnership.

  14. #14
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    i prefer to setup something without a partnership other wise you mite have problems if one kicks off etc..

  15. #15
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    I would pay them for work performed. If friends, maybe even a beer or something... keep it low key. Many times, people will help since they may gain experience working on the project. Money is not the great motivator it seems.

    11 years ago, when I had an idea about a business, I was going to do something similar. Instead, I paid the guys. I'm so glad I did that! Now I don't know where they are at... how time changes everything....
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  16. #16
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    Partnerships are the worst that can happen, in EVERYTHING.

    Unless its only two and you are really really close friends (Americans don't count as friends ).

    Peace,
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  17. #17
    Quote Originally Posted by MikeWalczak
    Well obviously when it comes to making decisions, you are going to have to consult with all 10 people before doing anything major.
    Yes and no.
    If he has over 51% he has major choice. So yes they have a say..but it really doesn't count

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  18. #18
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    Yes and no.
    If he has over 51% he has major choice. So yes they have a say..but it really doesn't count
    Yes, but like you said "if." I was speaking in a general matter, there are of course measures that could be taken to give him more control.

  19. #19
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    I am not sure what the laws are like where your from but i know that in NZ if you own a company and your company has a consitution then it requires 75% of the votes to change this. So ideally you only want to give 24% of the shares to your friends and keep the remaining 76% for yourself so you have absolute control if this is your baby.

    Also make sure that you have a consititution stating that if any partner wants to sell they must first offer their shares to you then to any other partner in the company first before selling out to joe bloggs.
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