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Dave Gillen – Former FS Concierge
  • Total posts: 2,566

Hi [USER=111572]@andrewn[/USER],

Normally you would issue shares in the company – say 6 shares in this case (you owning 5 and your partner owning 1) or it could be 60 shares with 50/10. Later you can sell 1 or more of your shares to the other person. Or sometimes new shares are issued and purchased. Some googling on this topic will help.

Initially your company will be worth $60k but that will change over time, and you’ll need an agreed way to calculate the new business value. That will determine the cost of your assistant buying more shares.

As Paul mentioned, the ownership of the company doesn’t have to match the investment amounts, because other factors may be involved such as the split of labour or the relative experience/contacts/intellectual property you each bring to the table. In the end it all has to go into a solid contract because there’s no set answers and it’s very easy for one partner to dispute what’s fair at some later point.

Co-ownership can be pretty complicated, so for small percentage stakes it’s also worth investigating other options/incentive schemes/bonuses.

Good luck and hopefully some of our members can share their experiences.