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Business Running Another Business
Who are you?? I would talk to both your accountant and your lawyer.
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Sounds like the current owner is creating an overly complicated scenario. Unless I am missing something, instead of creating two companies and filtering the net profits of Business A to Business B where you will share the profits, the owner should simply make you the CEO of the current company and include a profit sharing clause as part of your comp package.
Either way, the owner is the only person determining the net profits, plus in both scenarios you are partner by title only and not by actual ownership (investment, liability, voting rights, etc...). Do you have any rights if the current owner decides to sell the business? Are you liable in any way if the business fails?
I would stick with one company and a profit sharing program.
Hope this helps.
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I need help on how to go about doing this. I am currently managing all of the operations for a pretty lucrative online business. The owner wants to bring me in as a partner, but not in the primary business. What she wants to do (and I agree) is set up a separate business that will run the day-to-day operations of the first business. Business A is the parent company that holds the income and expenses as an LLC. Business B will be running the business (also an LLC). Once the agreed-upon business expenses are paid by Business A, the profit goes to Business B and is split between both partners. Before you ask, there is no way she will open a partnership on Business A because she is nervous about her business (for lots of reasons). Is there any way this can be done? If this is not the way to do it, is there some way that we can do this? Some kind of agreement between us where we split the profits without her having to make me an actual partner in the original business? Where can I find information on this? I have tried searching for "non-equity partnerships," but all I get is information on law firms. Can someone help me please? Time is of the essence....