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My company is a C-Corp. I have been asked by a much larger company to consider partnering with them. What will happen to my C-Corp should I decide to do this? Also, since they are much larger than me, how do we determine the percentage of ownership for each? They are bringing the money and resources and I am pretty much adding a new product line to their business.
I have been asked by a much larger company to consider partnering with them.
What will happen to my C-Corp should I decide to do this?
They'll disappear.
Quote:
They are bringing the money and resources
and I am pretty much adding a new product line to their business.
...how do we determine the percentage of ownership for each?
That's called negotiation.
If you don't already have the good attorney and CPA that this sort of deal warrants...
Tread carefully! Will you have any control? Can you sell elsewhere?
What if they sell $0 of your products? Do you trust them? Will you still be involved?
My son is doing something similar, they worked out an agreeable split on product sales, he produces a certain amount and they market, sell and do customer service. They pay his LLC and he gets a 1099.
If you're just doing one new product line, I think your C-corp would stay and you'd work out terms but you wouldn't really be forming a legal partnership.
My company is a C-Corp. I have been asked by a much larger company to consider partnering with them. What will happen to my C-Corp should I decide to do this? Also, since they are much larger than me, how do we determine the percentage of ownership for each? They are bringing the money and resources and I am pretty much adding a new product line to their business.
If you have a C corporation and don't have a crackerjack CPA and corporate attorney, then you have zero business going through a business deal of any kind. In fact, I'm trying to figure out why you are a C corporation in the first place.
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