Business Lawyer Recommendations and/or advice:

NYSpeed Automotive NYSpeed Off Topic
1

Who here has bought into a business, like becoming a partner, investing a certain amount etc. I have found something I’ve been greatly interested for sometime and sat down with the owners of the business today for a quick chat. We will be discussing more next week as to the amount of investment they would like, the percentage of ownership I would have, and my expected rate of return. Basically there are currently 4 owners and I would be #5 if I decide I like the agreement, as they have been looking to bring in someone for a short period of time now.

Has anyone here bought into a business or brought someone into their business as either a silent or active partner? Please feel free to share your info or contact me! Also lawyer recommendations to draw up a contract would be appreciated.

Thanks,

Mike.

2

i’d be happy to chat about this but it should be done not in the open like this i think… maybe in a hidden forum.

for legal i use Hodgson Russ for my US legal in the guaranty building in downtown Buffalo. they are amazing but you should have 85-90% of your arrangement done before you engage a lawyer imho. go to the lawyer when you need stuff secured in legal, not to help you figure it out. You know what you want better than a lawyer does.

3

I will PM you sir! Thanks.

4

I’m a silent partner for my buddy’s gym in Houston. We just wrote up an agreement between us. I know this doesn’t help at all, so good luck.

5

LOL well was the agreement at least notarized? Is it like a shark deal type of investment? Share what you can.

6

You can write an agreement between people and everyone sign it on your own. Notary isn’t required but it generally helps validate it if it was ever called into question so would save you some time in a legal battle so it is highly suggested.

What you are getting out of it and how the company is built is kind of the complex part part. If it is a simple partnership that is member owned like an LLC, you can simply have your own agreement being an investor saying you invest $X and you get $Y every Z months or some other payment agreement. If they default and don’t pay you, then you need to decide where your debt lies up in the general grand scheme of things meaning if they go bankrupt, they may owe a bank loan or other debt before anything left pays your agreement out. If they have a simple agreement now and all owners of a business equally, then a lot of cases when someone buys in it is because they need the money as part of an operational cost and then would update the agreement from being each 25% owner to each 20% owner with you having a new percent now.

I have never dealt with anything but LLCs and partnerships but S corps are a bit more complex and may need more formalities like existing share votes, if anyone else has power to decide, and also have a formal board meeting that follows their resolution policy with votes/signatures.

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I am also not a lawyer or accountant, just dealt with stuff like this on and off for a while so that is just my experience.

7

I was always told an Operating Agreement had to be done by a lawyer. I’m not familiar first hand though as one business my partner and I share equally, (so we never drafted one as default is 50/50 split) the other is solely mine.

8

I will hopefully be buying into a corporation sooner than later. The last buy in was 100% handled between lawyers. They drafted the documents and helped negotiate the terms. Now that the current owners have that experience, I will need a better lawyer. I’m gonna call Saul.

9

PM me if you would like someone else’s contact. I work with Lippes Mathias for all of our business related things and they are amazing.

10

Pretty much what Boxxa said.

I give this much money XXXX, get xxx a month and end up partial owner. if business goes under before xxxx is reached xx% remained is owed buy interested party a.

11

Well as of now things are not moving forward. I used his tax documents to determine EBITDA, comparisons to other businesses in the same market, did calculations and showed them to my accountant to see what he thought. using the times multiplier method we were actually in similar ballparks of what we thought the business was worth, but the owner would not budge, came down to a diff of 5K for the investment. We’re both holding ground, so unless he changes his mind I’m not budging, and maybe I’ll lose out but such is life, I’ll invest in other aspects that I’m already in.

in the meantime, since I planned on dropping a large chunk of change, I took a tiny bit of that chunk of change and treated myself to a motorcycle :smiley: put a deposit on one, will post pics if that doesn’t fall through.

EDIT: It’s not my old GSXR, I figured that was one of those things I’ll talk about 50 years from now like all the old timers I work with, “Wish I never sold that” type of thing.