How to structure a Partnership?

[Vito]

Hi guys

I have a product that I have developed, but in order to take it to the next level I need to engage a friend of mine who's company specialises in technology.

To provide ongoing support and also to add credibility, I want to engage his company in a 50/50 partnership rather than pay him for the work.

I would then want to sell the product through my company but obviously his company needs to get 50% of the profits, how do we structure this? Also need to think about an exit strategy...

I'm guessing that the easiest thing would be to set up a seperate company with us both having a 50/50 stake, but I already have 3 companies and don't wish to add to this.

What would you guys advise?

[fzbucks]

Hi guys

I have a product that I have developed, but in order to take it to the next level I need to engage a friend of mine who's company specialises in technology.

To provide ongoing support and also to add credibility, I want to engage his company in a 50/50 partnership rather than pay him for the work.

I would then want to sell the product through my company but obviously his company needs to get 50% of the profits, how do we structure this? Also need to think about an exit strategy...

I'm guessing that the easiest thing would be to set up a seperate company with us both having a 50/50 stake, but I already have 3 companies and don't wish to add to this.

What would you guys advise?

Go on Dragons Den for a larf

[VectraMan]

Why do you need a third company? Just create an agreement between the two companies that gives his company a royalty (are you sure 50% is justified?) based on sales of that product (not company profit as you may want to do other things). You should include your exit strategy within that.

Obviously you want to be sure the terms are clear and you may need a lawyer.