Business Partnership Agreement

[jakeweil1]

My girlfriend and I are partaking in a business venture together. I have an 80% stake in the business and she has a 20% stake. We are basing our respective stakes in the business by the amount of startup cash that we each put down. She will be signing documents with me such as leases since my credit is not the best. I want to idemnify her from 80% of the debt to plan for the worst case scenario of the business going belly up. Is this legally possible?? Do I need a lawyer to do this? Or can I just draw up a real simple document that states our stakes in the business and idemnify her from all but her stake of the debt, and have both of us and a witness sign?

 

[divgradcurl]

My girlfriend and I are partaking in a business venture together. I have an 80% stake in the business and she has a 20% stake. We are basing our respective stakes in the business by the amount of startup cash that we each put down. She will be signing documents with me such as leases since my credit is not the best. I want to idemnify her from 80% of the debt to plan for the worst case scenario of the business going belly up. Is this legally possible?? Do I need a lawyer to do this? Or can I just draw up a real simple document that states our stakes in the business and idemnify her from all but her stake of the debt, and have both of us and a witness sign?

I'm not really sure what you mean by "indemnify her" from 80% of the debt. Any debt you take on is going to be personally gauranteed by whoever signs for it -- if she's the sole signor on the lease, then she's 100% liable for the lease, period. Your 80/20 ownership is irrelevant to the landlord or creditor -- whoever signs for the debt is responsible for the debt.

Now, you could have an agreement between the two of you that she is only liable for 20% of the debt, no problem there -- but if she signs for anything, the creditor will come after her for payment, it will be up to her to go after you for the other 80% if you don't pay up willingly.

You probably should go talk to a lawyer, though, who can explain all of the rights and responsibilities of each of you, and help you choose the right kind of business organization for your business.