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hschiro
01-11-2014, 02:51 PM
I plan on potentially going into business with a partner. My concern is that I have a lot more assets, and in a worse case scenario if this second operation doesn't go well the bank could still go after my assets to secure their interest? Or is there a way to set it up where he is responsible for his half of the loan and for me my half? I currently have a successful operation and the plan or idea is to open a second operation with he being part owner and operator. To complicate matters it is difficult for him to obtain his own loan of around 75k due to his credit. Any feedback or answers would be greatly appreciated.

Freelancier
01-11-2014, 05:16 PM
If you have a partner with a large outstanding debt, that's a terrible partner to have for a new business, just because their self-interest isn't going to align with your self-interest. And their ability to fund their activities is not going to match your need for them to fund their activities.

If you co-sign a loan with him, you're both equally responsible, it's not split by the bank in half for each of you. The only way it splits in half is if you each get a loan for 1/2 the total you need.

If the bank is securing anything against specific assets, it has to file that information (there's a form for it), otherwise it's an "unsecured" loan and not secured against specific assets. In that instance, only if you're forced into bankruptcy can they get access to your assets.

If you have a success operation but insufficient cash to open a second operation... and your partner also has insufficient cash to open a second operation... then find a different partner for that second operation.