Partnership Contract

[asg11us]

I'm forming a development partnership with a friend. I'm bringing to the talbe a valuable domain name appraised in the low to mid $xxx,xxx range, as well as a solid business plan/strategy for developing the name. He's bringing some solid business and fundraising experience, a host of great contacts and

I have a number of concerns what will happen to my domain name if this partnership doesn't work out and we're trying to structure our partnership agreement to alay these concerns. However, we're just not sure how best to do this. Should the contract have a buyout clause that will allow me to buy back all rights to the name and the business for a predermined amount of money (e.g. dependent on how long the partnership lasts and/or how much money we are eventually able to make)? Should the new company grant me 51% of the shares so that I maintain a controlling interest?

We both plan on consulting with an attorney experienced in this field (i.e. intellectual property and contracts), but I'd really like to have some suggestions/advice from any of you who have gone down this road on how to best structure this deal in a way that my asset and idea are protected in the event that things go wrong with the partnership.

Thanks in advance for your help!!!


Andy

 

[bwhhisc]

I'm forming a development partnership with a friend. I'm bringing to the talbe a valuable domain name appraised in the low to mid $xxx,xxx range, as well as a solid business plan/strategy for developing the name. He's bringing some solid business and fundraising experience, a host of great contacts and

I have a number of concerns what will happen to my domain name if this partnership doesn't work out and we're trying to structure our partnership agreement to alay these concerns. However, we're just not sure how best to do this. Should the contract have a buyout clause that will allow me to buy back all rights to the name and the business for a predermined amount of money (e.g. dependent on how long the partnership lasts and/or how much money we are eventually able to make)? Should the new company grant me 51% of the shares so that I maintain a controlling interest?

We both plan on consulting with an attorney experienced in this field (i.e. intellectual property and contracts), but I'd really like to have some suggestions/advice from any of you who have gone down this road on how to best structure this deal in a way that my asset and idea are protected in the event that things go wrong with the partnership.

Thanks in advance for your help!!! Andy

Unless your partner is putting in an equal amount of assets or value, it would be smart to keep a minimum of 51%. You might consider getting into a contract where you keep 100%, and put together a contract for % of profits, and then a % of ownership in the domain over a period of time. I would seek the advice of a lawyer, but you certainly protect yourself in numerous ways if you hold a majority share of stock in the business.

 

[fab]

I raelly don't think a lawyer can help you with this unless you guys have a basic business agreement. I have been and am still considering something similar, so you really need to make a business agreement first, where the lawyer can put it in writing, furthermore, you should somehow evaluate each of you contributions and devide the comapny or partnership based upon that.

Domaining is a very difficult business to evaluate, as well as skills and the sort.

 

[EnricoSchaefer]

You need to put basic terms together to see if you really can reach a deal. You certainly know what your expectations are out of the deal, write them down, discuss them with your partner and see if it makes sense to take the next step and pay money to an attorney to put more formalized deal together. Issues include:

1. What are the 'real world' obligation of each in terms of money, management, sweat equity, other contributions
2. What is the ownership percentage breakdown in terms of profit sharing and voting (they can be different)
3. Who is the manager of the company who will be responsible for day to day operations, check writing, contracts, hiring, etc.
4. Is money coming in as a loan or as capital;
5. What does a partner get paid if they want out a year from now, market value or book value, if anything;
6. Can a partner sell their share of the company to a third party.

There are other issues but think like a businessman, not a lawyer, and figure out what the essential business terms are. A lawyer can help you take care of the rest. Good luck.