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How do I legaly do this?

Discussion in 'Christian Philosophy & Ethics' started by chilibowl, Apr 5, 2005.

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  1. chilibowl

    chilibowl Member

    I was sat down with about 40 other venders in a meeting with a Big national account one that everyone knows, and they were looking for a way to cut cost. so they pitted us against one another to bid our rates and offer the best service.. Well in what I do I know there was only me and the two dealerships repersenting our industry, and If I keep everything the same I underbid them by about 20% so I think I'm ok there.
    But I see a great need for paint and body work as well, and like in my industry the dealerships are the only one's bidding.
    This is where it get confusing. I've known a guy with a good size body shop for a while and I spoke with him about this and he's willing to do the work for 60% of the billed labor and I get 40% and the parts mark up for suppling the parts and the (Customer approved business) to work under .. that includes all the epa stuff and the proper insurance the correct county/state paperwork he has that stuff as well but not to the standard in which this national account wishes...
    So my question is how do I make him or his company apart of mine with out exchanging ownership of our two companies. We want to keep all aspects of our two companies seperate except this one joint venture.

    Can he retain ownership of his company and then work for me?

    Just some fat to chew
  2. Linux98

    Linux98 Well-Known Member

    Can't you pay him as a vendor?

    You get paid the full amount by the national account, your buddy does the work and then sends you a written invoice. You pay him, he gets his money and you write the invoice off as an expense.

    Or you get a lawyer and develop a separate company.
  3. heron

    heron Legend

    In Relationship
    Paying for services is a standard practice. We have two business and sometimes one rents equipment from the other, as a way to keep the accounting accurate.

    This also keeps you in a safe zone, as partnerships can be a continual disagreement over who is doing more.

    You can treat this like a general contractor would, where he takes in the clients but subcontracts the services, or vice-versa.

    We use our accountant for everything. The money that we give him for advice always pays for itself.

    P.S. That pitting against each other meeting was so cheesy it makes me sick. They probably read about it in a textbook.
  4. Dark Matter

    Dark Matter Well-Known Member

    You write an Agreement with him outlining the spefics of your arrangement. This includes an NDA which shows that he only knows about the bidding opportunity because you showed it to him. This protects you from him going about it on his own. Then you let him bid, get the jobs, and work, and you get paid your commissions. Be sure to have an open book Paragraph in your Agreement to review his books.

    Dark Matter
  5. Wildwood

    Wildwood Well-Known Member

    Is your business incorporated or are you doing business as a sole proprietor?

    Operating as a partnership can make you liable for debts of the joint venture.

    If you aren't incorporated, you should talk to a lawyer. There are other similar business forms in some states that might also meet your business needs. Some smaller law firms will talk to you for free long enough to evaulate what you need and will tell you how much it will cost. Call and ask if they give a free consultation to evaluate your business needs. Some states provide the forms for you to do the paperwork yourself. Look for the web site for your state, such as the office of the secretary of state or department of commerce.
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