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law question - opening up a new company, but giving a huge share

Discussion in 'Business & Tax Advice' started by trex191, Apr 21, 2012.

  1. trex191

    trex191 Regular Member

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    I am trying to open my own company. The warehouse and supplies being sold is not mine. So there is really no investment for me. He wanted an LLC or some other form of contract to be made so that he owns most of the share and I own a tiny part. Since it is my company what could I be liable for or is it pretty much safe since I am investing nothing ,but my time.
     
  2. truthordesire

    truthordesire Registered Member

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    Hi trex,

    I set up companies for a living so hope my advice helps.

    Once the company is set up and "he" owns most of the shares, "he" will be the majority shareholder so it really won't be your company. You will have a minority shareholding in a company in which "he" will have control.

    Since it is a LLC (Limited liability corporation), you are only liable for the shares you own, nothing else.



     
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  3. ProAffiliate01

    ProAffiliate01 Junior Member

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    Just make sure you know exactly what you are getting yourself into. Know every detail of the contract so there is no confusion and conflict in the future.
     
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  4. volund

    volund Senior Member

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    I agree if you give someone else the majority of the shares it is not going to be your company.

    For something like this you really need to spend a few bucks on a lawyer to make sure you are not getting screwed.
     
  5. grell

    grell Newbie

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    You are probably going to be liable for taxes too even if you are only contributing services. I would take volund's advice and consult a lawyer. If you don't have the funds, check with your local bar association to see if there is a clinic or non-profit in the area that helps with business startups.
     
  6. truthordesire

    truthordesire Registered Member

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    Digging a bit deeper each US state has slightly different laws, but you have my skype so keep me posted...
     
  7. bitencrypt

    bitencrypt BANNED BANNED

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    Have fun with this>>> en(.)wikipedia(.)org/wiki/preferred stock
     
  8. GauravJ

    GauravJ Power Member

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    LLC means Limited Liability Corporation and in such a form of organisation promoters are liable to extent of their subscribed capital Infact it's a hybrid form of Partnership and Corporation
    So, if total capital is $100 and your subscribed capital is $1 then your maximum possible monetary loss in such a venture is $1 but also note profit shared is also directly proportional to subscribed capital part unless specifically mentioned in MOA or providing you some allowances.
     
  9. martha4

    martha4 Newbie

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    you know about all the detail of the contract in this way no chance of confusion...
     
  10. Ebcompany

    Ebcompany Registered Member

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    Yeah since he owns the "majority" make sure you really trust him as he will have the ability to do things under the companys name and if you are listed as a managing member or whatever you assume, then you will be responsible for the actions of the company even if he makes the decisions. So just be careful with it
     
  11. Reyone

    Reyone Elite Member

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    Whatever it is, sign a SHAREHOLDERS AGREEMENT