Sandi Bowman
April 1, 2007, 10:25 AM
Hi, Joe,
Disclaimer: What follows is based on experience, observation, and other learning. I am not a lawyer and this should not be considered legal advice.
People can be friendly and supportive as all get out to one another BUT, if you value your friendship, you would be wise to put things in writing between you and your partner and also between the two of you and your suppliers. VP's are notoriously disposable so your support from the company is tenuous at best.
Have you given thought to what happens if someone dies or is replaced in the company and refuses to acknowledge your claims after you've both built the territory? What if you or your friend dies...does the business also die with it?...how will families survive? What if one of you decides they want out because they have other interests down the road? Do you have a written plan in place for a buy-out?
I hate to be a party pooper but you DON'T have a business at this point...you have hopes and dreams and promises...and that doesn't amount to a hill of beans when things change unexpectedly. Families and inheritors can be very nasty where money is concerned and not nearly as trusting as you and your friend. Without some type of written commitments and plans on all sides, you have nothing, legally, as I understand it. Zilch. That's not the way to start or run a business.
Eventually you may want to really expand and need to finance part of your expansion. No bank or anyone else would take you seriously if you neglect this essential part of your business. In fact, some businesses (especially larger well run ones) will refuse to work with you as a vendor to their business if they find out you are operating so unprofessionally in your business. Why? Because they could end up sitting on tons of product that is tied up in court while ownership and right to sell the product is in dispute. Who wants that type of headache?
Take care of ALL the business...or get out while you can with minimal losses.
With all best wishes for success...
Sandi Bowman
Disclaimer: What follows is based on experience, observation, and other learning. I am not a lawyer and this should not be considered legal advice.
People can be friendly and supportive as all get out to one another BUT, if you value your friendship, you would be wise to put things in writing between you and your partner and also between the two of you and your suppliers. VP's are notoriously disposable so your support from the company is tenuous at best.
Have you given thought to what happens if someone dies or is replaced in the company and refuses to acknowledge your claims after you've both built the territory? What if you or your friend dies...does the business also die with it?...how will families survive? What if one of you decides they want out because they have other interests down the road? Do you have a written plan in place for a buy-out?
I hate to be a party pooper but you DON'T have a business at this point...you have hopes and dreams and promises...and that doesn't amount to a hill of beans when things change unexpectedly. Families and inheritors can be very nasty where money is concerned and not nearly as trusting as you and your friend. Without some type of written commitments and plans on all sides, you have nothing, legally, as I understand it. Zilch. That's not the way to start or run a business.
Eventually you may want to really expand and need to finance part of your expansion. No bank or anyone else would take you seriously if you neglect this essential part of your business. In fact, some businesses (especially larger well run ones) will refuse to work with you as a vendor to their business if they find out you are operating so unprofessionally in your business. Why? Because they could end up sitting on tons of product that is tied up in court while ownership and right to sell the product is in dispute. Who wants that type of headache?
Take care of ALL the business...or get out while you can with minimal losses.
With all best wishes for success...
Sandi Bowman
