How do we structure a company with two founders/partners living in two different states?

Standard

My answer to How do we structure a company with two founders/partners living in two different states?

Answer by Ken Larson:

Between the two states in which you live. choose the state in which the largest number of potential clients are potentially located which may require face to face contact. Register an LLC in that state and establish the home office there.

In the event it becomes necessary to set up an office with a physical presence in the state in which the business is not registered, register as a foreign (out of state entity).

Many of my clients do business in multiple states without having to register there because they do not have physical presence in those states and work remote or in customer facilities.

I strongly recommend an operating agreement between the two of you. An operating agreement is a separate document, not controlled or required by the state or the federal government but very important to your company.

It should be a simple, straightforward document you and you and your prospective partner(s) can draft yourselves. It should cover such matters as % of ownership, how revenue will be distributed and other general matters, as well as who can commit the company in the form of credit cards, who signs checks on the company account and other administrative matters.

Buying out a partner should also be covered.I have seen many enterprises fail or go through terrifically hard times due to lack of an operating agreement. The parties should sign it after a review by a lawyer.

It should then be notarized and made an official part of the company file.A free sample operating agreement with instructions is at the References file in the Box in the left margin of the following site: http://www.smalltofeds.com

How do we structure a company with two founders/partners living in two different states?

Advertisements

About rosecoveredglasses

2 Tours in US Army Vietnam. Retired from 36 Years in the Defense Industrial Complex after working on 25 major weapons systems, many of which are in use today in the Middle East. Volunteer MicroMentor. I specialize in Small, Veteran-owned, Minority-Owned and Woman-Owned Businesses beginning work for the Federal Government. MicroMentor is a non-profit organization offering free assistance to small business in business planning, operations, marketing and other aspects of starting and successfully operating a small enterprise. You can set up a case with me at MicroMentor by going to: http://www.micromentor.org/ key words: "Federal Government Contracting"

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s