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    10 Replies Latest reply on Aug 26, 2008 2:50 PM by joyenterprise

    need advice

    lorimar Newbie

      I'm starting a new online business with a friend. can anyone give me some idea where to begin?

      Also my friend tells me that she should be doing all the business set up since she knows more about it, and I should be making some of the merchandize (Some of my things will go up on the website), she will not be making the merchandize.
      I didn't think it was a good idea since I feel that we should do the setting up together, but perhaps I'm wrong about this.
      When she tells me to concentrate on making the merchandize and she will do the set up to me it indicates that I am working as an employee and not as a business partner. Her husband is creating the website and she wants him to also do the accounting.
      Perhaps I'm being overly cautious but, then again I'm new at this and want to be fair.
      Do you have some advice?
        • Re: need advice
          Lighthouse24 Ranger
          It sounds like you'll want to confirm your status -- do you have ownership interest in the company, or are you an employee of the company? If you have ownership interest, you'll want to immediately get copies of all the company's start-up filings (registration, organizing documents, etc.). If you're an employee (assuming that this firm is located in the USA), then the company has specific obligations under state and federal law, and you have specific rights. It's completely fair for you to know exactly where you stand, and to expect to work and benefit accordingly -- it not fair for your friend to have it both ways (treat you as a partner or an employee, at her convenience). Good luck.
          1 of 1 people found this helpful
          • Re: need advice
            LUCKIEST Guide
            need advice, Welcome.

            Lighthouse always has great answers. Friends do NOT always make good business partners.
            Tell us more about you, YOUR?? business and where you are located??
            Do you have a Lawyer?? A Business Name?? Have you obtained a Federal I D Number??

            Do you know about SCORE?? SCORE is FREE and can give you great advice FREE.
            The more you share with us, the better our answers to you.

            Good luck, LUCKIEST
            • Re: need advice
              rneube Newbie

              I would tell you not to do anything until you have a written contract where you both define your responsibilities and shares in the company. They seems to have all the control: the website -and its Domain Name- and the accounting (access to the checking account). To form the business as a LLC or Corp is not expensive and it would allow you to have a set of documents that would prove that you are a member and your interest in the business. Any incorporating company would provide you templates of an operating agreement (or Bylaws and organizational resolutions in case of a corporation) that would help all the owner to put everything on the table.
              Since this is going to be a business with internet as the main sales channel, I would also suggest you to put the Domain Name on the name of the company. If your partners own the domain name, the will own everything.
              1 of 1 people found this helpful
                • Re: need advice
                  lorimar Newbie
                  Thank you, your advice was very helpful.
                    • Re: need advice
                      Fortis Wayfarer
                      I would have to agree about the contract. From my lending experience I have seen a lot of partnerships not work out. With a contract it will define the roles and an exit strategy. You can even use one of those online legal document companies like Legal Zoom. Wall Street Journal talks highly of those companies.

                      From your post it sounds to me like there is already two ideas on how the business should be ran. That needs to be confronted upfront or you could see trouble down the road. Make sure your business plans defines the roles of each partner and where the company is going. Use it as your blue print to success.

                      Best of luck to you and your business!
                    • Re: need advice
                      lorimar Newbie

                      Thank you, I will check into this.
                    • Re: need advice
                      rneube Newbie

                      Legal Zoom is an alternative but you will have to expend money. Before doing so, check free resources, read, learn and which is more important, learn how to make the right questions. For instance, here are templates of Bylaws, operating agreements and shareholders agreements: http://www.activefilings.com/resources/docs/contracts/index.htm In case you don't know, a shareholder's agreement is a document that you normally prepare before incorporating a business. Then once incorporated, the Directors will execute the provisions of the shareholder's agreement. You can get ideas about what to consider regardless of the type of entity that you decide to form.
                      • Re: need advice
                        m.rick Wayfarer
                        First and foremost, you should look up your local score, great free advice. Also sounds like you may want to consider forming an LLC, it helps formalize the paprtnership and serperates your personal life from your business. It also provides the opportunity to write an operating agreement to define the business arrangement and define everyone responsibilities and duties. It also helps protect you from your business AND your partner. Go to www.about-small-business.com it has some basic easy to read info on the topic.

                        Good Luck
                        • Re: need advice
                          joyenterprise Wayfarer
                          Why re-invent the wheel? If you are unsure about all of this, follow your gut feelings. I have tried it your way and it is very difficult. Ecommerce is the way to go, but you need a sound infrastructure and a proven system. Check out this site:
                          www.joyenterprisewj.com This will give you an overview. If you want more info, request the password.