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Texas User, trust me you have too much to learn to be a partner in a business at this point in time. Having a name and logo isn't even the tip of the iceberg. You refer to this partner as a CEO which implies that this is a corporate entity. In order for you to be a partner with this man you need to own corporate stock issued at a corporate meeting using a corporate resolution legal form. The corporation has to be legal in your state in order to be subject to corp state filing fees and taxes which must be paid. I didn't hear any of this.
Has the 'local' partner filed papers with Texas for a legal business name, and in what form of ownership (partnership, corp), did you sign something that indicates you are legally involved and legally liable? Have you put money into this venture and in what percentage to the others and is it documented? Has he filed forms with the state sales tax authority so you don't have to pay it on your purchases and in order to file regular reports to the state if you need to collect it? What type of book keeping and chart of accounts have been established? Insurance, bonding? How will payroll be handled and by whom or will everyone take dividends instead? Who has signing authority at the bank for checks?
This is what I see - You have no clue about the particulars and don't seem to be in on the loop. You have been 'appointed' marketing director. What this means to me is that you are an employee which is probably the best thing till you learn much more about these important regulatory facets of business. You need to be fully informed about the implications and actions concerning the business end of things especially if your name is on anything, or step back and be an employee or less desirable, a contractor which entails paying your own self employment ss taxes. As a business owner or contractor you will not be able to access unemployment should you need it.
There are ways to make the establishment of a business a bit more easy with the proper guidance and education but it is never really simple and it always has consequences. You should have been in on any meetings with accountants and attorneys, know the answers to all of the above, and have a list of what steps are to be taken in addition to a calendar of when things need to be filed to be a true partner. If this CEO is to be your mentor he should be explaining all of this in detail, if not find a proper mentor before getting involved as a partner and liable. There can be a lot of handholding when a newbie Score is a good resource.
I don't think I want to go into partnership with the 2 friends. Maybe they are using me for Marketing? I rather start my own. Its a computer repair business that I want to do. Kinda like the Geek Squad.
CEO/Founder said I am the Marketing Executive and told me to start marketing the business and to get the word out there so we can more jobs. Its a computer repair business like the Geek Squad. How can I get out of this? I think I want to start my own business.
He talked something about working on commision. Maybe I am a employee?
I have not put any money into this business. He has not asked me to.
The sad part is that I have Business degree but that was back in 2003. Those courses did not teach me what you are telling me here.
Quote:
Originally Posted by Sgoldie
Texas User, trust me you have too much to learn to be a partner in a business at this point in time. Having a name and logo isn't even the tip of the iceberg. You refer to this partner as a CEO which implies that this is a corporate entity. In order for you to be a partner with this man you need to own corporate stock issued at a corporate meeting using a corporate resolution legal form. The corporation has to be legal in your state in order to be subject to corp state filing fees and taxes which must be paid. I didn't hear any of this.
Has the 'local' partner filed papers with Texas for a legal business name, and in what form of ownership (partnership, corp), did you sign something that indicates you are legally involved and legally liable? Have you put money into this venture and in what percentage to the others and is it documented? Has he filed forms with the state sales tax authority so you don't have to pay it on your purchases and in order to file regular reports to the state if you need to collect it? What type of book keeping and chart of accounts have been established? Insurance, bonding? How will payroll be handled and by whom or will everyone take dividends instead? Who has signing authority at the bank for checks?
This is what I see - You have no clue about the particulars and don't seem to be in on the loop. You have been 'appointed' marketing director. What this means to me is that you are an employee which is probably the best thing till you learn much more about these important regulatory facets of business. You need to be fully informed about the implications and actions concerning the business end of things especially if your name is on anything, or step back and be an employee or less desirable, a contractor which entails paying your own self employment ss taxes. As a business owner or contractor you will not be able to access unemployment should you need it.
There are ways to make the establishment of a business a bit more easy with the proper guidance and education but it is never really simple and it always has consequences. You should have been in on any meetings with accountants and attorneys, know the answers to all of the above, and have a list of what steps are to be taken in addition to a calendar of when things need to be filed to be a true partner. If this CEO is to be your mentor he should be explaining all of this in detail, if not find a proper mentor before getting involved as a partner and liable. There can be a lot of handholding when a newbie Score is a good resource.
My bet is that he will handle you like a contract person by giving you a check based on an apparently unknown percentage of the profit on jobs that you sell. This means you will be responsible for certain taxes at the end of the year as if you are self employed. It also means you won't qualify for unemployment.
If you are an owner you should know the profit margin and help to set it as well as know the answers to all the other questions. I consider this unlikely. If you get a check with all the proper deductions then you are an employee. I consider this unlikely.
It's common for some business owners to save money and paperwork to use this contract tactic and it's illegal to make someone a contract person as opposed to an employee if, he can set their hours for them, tell them what to do, or how to do it. Contract workers are to be used on a project basis only and not restricted to any one employer.
You can start your own business by making an appointment with an accountant who will lead you through the proper set-up and keep you out of trouble. Contact the small business entity at your local college, the SBA for a Score mentor, or a former professor to supplement direction from your accountant and lead you in the right direction with business plans and budget. It doesn't have to be complicated but it does have to be done right. Sloppy in business doesn't cut it.
You are probably right, a contract person. Well I plan to do this on the side anyway. I have a FT job.
At this point, I plan to start my own business.
How do I tell my friend that I am out of this?
Quote:
Originally Posted by Sgoldie
My bet is that he will handle you like a contract person by giving you a check based on an apparently unknown percentage of the profit on jobs that you sell. This means you will be responsible for certain taxes at the end of the year as if you are self employed. It also means you won't qualify for unemployment.
If you are an owner you should know the profit margin and help to set it as well as know the answers to all the other questions. I consider this unlikely. If you get a check with all the proper deductions then you are an employee. I consider this unlikely.
It's common for some business owners to save money and paperwork to use this contract tactic and it's illegal to make someone a contract person as opposed to an employee if, he can set their hours for them, tell them what to do, or how to do it. Contract workers are to be used on a project basis only and not restricted to any one employer.
You can start your own business by making an appointment with an accountant who will lead you through the proper set-up and keep you out of trouble. Contact the small business entity at your local college, the SBA for a Score mentor, or a former professor to supplement direction from your accountant and lead you in the right direction with business plans and budget. It doesn't have to be complicated but it does have to be done right. Sloppy in business doesn't cut it.
These articles STRESS the very important issues...
Know Your IDEAL customer (so you don't waste your time with 'non-ideal' customers, they can really drain you), their buying habits, needs, how they will decide to choose YOU,
There is some great opportunity for you in this field. Your "friend" (CEO) probably realizes your potential to make HIM money. Granted, there are times that a manager can help YOU make MONEY too, and be prepared to act on that need. (If the business details get you tied up.)
I would be looking at 'apprenticing' someone to help in your most needed tasks (including the computer repair), and I would be sure to sub-contract the Accounting, state and federal filings, and any payroll. Your time is best spent in your area of expertise (at the moment).
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