Monday, July 12th, 2010
how to add new equity partner?
dosanicorp asked:
I am operating a very profitable business for last several years. I am looking to expand the business without creating new debts and to get some of my equity out of this business. I thought the best way to do that was to invite new equity partner into the business.
I am operating a very profitable business for last several years. I am looking to expand the business without creating new debts and to get some of my equity out of this business. I thought the best way to do that was to invite new equity partner into the business.
July 15th, 2010 at 8:26 am
It depends on the form of business (e.g. partnership, LLC, corporation, sole proprietor, etc.). I will assume that you are a sole proprietor. You will need to contact a CPA or lawyer to reorganize your business or you can do it yourself on the secretary of state website. You might consider forming an LLC, Subchapter S corporation, corporation, LP,or LLP. The reason for this is that by bringing in your partner as a sole proprietor, your business will automatically become a general partnership. GPs are fine, but things get messy without a solid partnership agreement.
AS for finding someone interested in buying a stake in your business, you might try networking with people who you think might be interested. Partnerup.com is a new website that may help you find someone, but I suggest you avoid it if at all possible (they’re expensive). You may also try a classified ad.