Robert, A good partnership agreement / shareholder agreement is a necessity if you are going to take on a partner and make your business venture a success. There are a lot of considerations:
How to split profits How to split losses How to elect a board of directors How to make management decisions (usually voting control of the board) How to handle stalemates If the company is in need of money what sort of future contributions will be required and how will those future contributions effect equity Is each partner/shareholder responsible for existing debts/liabilities of the company? Is each partner/shareholder entitled to any sort of salary? (what if the partner gets sick, cannot work, or will not work?) Under what circumstances may a partner/shareholder draw money out of the company? Is a partner entitled to work for the company or can a partner be "fired" as an employee - if so, does that partner retain his equity in the company? What happens when you want to add new partners? What happens when a partner wants to cash-out? Can a partner sell his interest to just anyone or must 100% of the partners agree to the sale or must the sale be ONLY to existing partners? What happens when a partner dies, gets a divorce, or files bankruptcy? How does the company get valued if a buyout is required? Do you mediate or arbitrate disputes or do you immediately go to court to resolve legal issues? What about competition - can a partner compete? Can an ex-partner compete? Define competition - can a (ex)partner hire away your employees? Can a (ex) partner solicit your customers? For how long after a breakup must an (ex)partner remain out of the field? Is a (ex)partner limited only from providing wireless access services or is he limited from web hosting, web design, computer repair, etc. The list goes on and on. I've handled several partnership/shareholder agreements and with the use of a good template and a good understanding of the WISP business, it's possible to put together a plan to protect yourself and your potential business partners from future disagreements. Trust only goes so far.... eventually something unforeseen will happen and when it does you want to make sure that you have a document to cover your basis. Regards, Larry Yunker II, Esq. Barkan & Robon, Ltd. (419) 897-6500 -----Original Message----- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Robert West Sent: Thursday, October 22, 2009 11:17 AM To: 'WISPA General List' Subject: [WISPA] Partnership Agreements I've had as few people approach me in the recent past wanting to partner up with me and to be honest, I can really use someone to carry half the load. I'm leery, however of getting screwed. (My father was in business for years with one partner and after they took on another they all got screwed to the point they were out of business) A requirement of a partner, for me, would be someone buying in with enough cash to grow the company to carry the extra weight of the new guy. The ones in the past turned out to be flakes with only dollar signs in their eyes. Not a good fit for me, I'm not about cash in my pocket, that comes with doing a good job and someone talking about money all the time scares the hell out of me. I now have a guy who looks good. Has the assets and interest. Has 3 small towers in parts in his barn, he has a barn converted to an office, construction equipment, trailers, etc. He understands there won't be any money flowing in his pocket for probably a year due to the expansion we're doing. He says that's fine. He also has the billing and general paperwork experience and background. (I absolutely hate dealing with the money and paperwork) Looks good so far. The construction equipment would be a help, no more begging things from farmers and making deals to get a hole dug. His current gig is as an electrical engineer, travels around the world as a contractor overseeing the repair and programming of robotics as well as the installation of the equipment. He says he's tired of being gone all the time and wants to stay in one area in a field that will be somewhat related and complicated enough that he won't get bored. Hmmmmm.. I've been to his home a few times, even put in a private wireless connection between him and his neighbor a mile away. Seems like a decent guy. Now he wants to sit down and work things out on paper. Any advice on things to cover my ass on? Things some of you wished you had down on paper when you started out? I'm not a partner kinda guy, my business plan is always in my head, I make much of it up as I go along and I jump in and just do things myself so this is new territory. (However, my total lack of organization is due to the previously stated operation of the business plan) I know some will yell to not take on a partner and I'd be one of them, believe me. That's why I've fought them off so long. But with a larger network coming online and eyes for even more expansion, it's looking good to me. (We currently only have a little less than 200 subs but anticipate twice if not 3 times that to come online in 2010) I just don't want to be out in the cold or screwed over due to my ability to trust. I'll never give up more than 50%, won't happen, but there are many ways people can screw others. It all sounds like picking the right person for marriage. (I have a bad track record in that too!!! ) Do ya think maybe him and I should just kinda "date" for awhile before we make the commitment? What would be considered first base in this kind of thing....? Configuring a CPE after a few dates then moving on to a customer installation then if it all goes well, take the plunge and climb a tower together? Weird. Thanks. Robert West Just Micro Digital Services Inc. 740-335-7020 ---------------------------------------------------------------------------- ---- WISPA Wants You! Join today! http://signup.wispa.org/ ---------------------------------------------------------------------------- ---- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/ -------------------------------------------------------------------------------- WISPA Wants You! Join today! http://signup.wispa.org/ -------------------------------------------------------------------------------- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
