I rent space as an independent contractor in a business. I'm considering a partnership in that business. If I want a stake in the company, I'm being asked to "buy-in" to this business.
The owner took out a $50, 000.00 loan for T.I's. (sign, built-in partitions, furniture, etc) Other than the structural T.I's and furniture/decor, there is no "real" property. The space is leased. Services are provided to clients, but my services are in a different area of expertise than the current owner. We each would continue to keep our own revenue from those services.
My question is this: The business has been open 2 years. (each of us have more years than that working in business but THIS business is 2 years old) It still has this debt.
Would it be customary for me to buy into that loan? Say the loan is $50K: I become a 30% partner. Is the appropriate "buy in" for me $15K since that's 30% of the amount of loan she took out for T.I's?
And I understand that after all P&L is calculated for each month I would receive 30% of what's left. What about loss? Am I correct in assuming that whatever we were to be in the red would be 30% my responsibility at that point?
The owner took out a $50, 000.00 loan for T.I's. (sign, built-in partitions, furniture, etc) Other than the structural T.I's and furniture/decor, there is no "real" property. The space is leased. Services are provided to clients, but my services are in a different area of expertise than the current owner. We each would continue to keep our own revenue from those services.
My question is this: The business has been open 2 years. (each of us have more years than that working in business but THIS business is 2 years old) It still has this debt.
Would it be customary for me to buy into that loan? Say the loan is $50K: I become a 30% partner. Is the appropriate "buy in" for me $15K since that's 30% of the amount of loan she took out for T.I's?
And I understand that after all P&L is calculated for each month I would receive 30% of what's left. What about loss? Am I correct in assuming that whatever we were to be in the red would be 30% my responsibility at that point?