I need advice please!!

[milics]

My husband and I are starting a new business as a corporation is our first time so we don't know exactly how this works, this business is about fences that we will rent for special events and construction.
...well we don't have much money so my brother want to associate with us and give us some money to buy all the material we need but now we don't know how to put my brother in the corporation because is under our names (my husband and me), and we don't know how to divide the business because my husband will do everything and my brother does not know how this business works because he have never done this before, my husband has the contacts, he was working doing this for 10 years so he knows everything, He will do the job but My brother lives in Virginia He would come when He can to get things moving until He can move here in Miami, can somebody explain me how we can divide and how this works my brother as well doesn't know, he ask me how we can do this it's!! very confused
thank you so much I really appreciate

Milagros

(If I wrote something wrong, Sorry my english is not good :o )

[ArcSine]

Getting your brother into the company in any form of co-ownership involvement might be a great idea long run, but it would also saddle you with difficult unwinding complications should it turn out to be a not-such-a-great-idea-afterall, in hindsight.

One possibility (of many, I'm sure) that might make sense is to initially:

Structure your brother's cash investment as a loan, not as an ownership buy-in. Pay him an interest rate that's reasonable considering all facts. Repay the principal on a schedule that's agreeable to all three of you.
Since your brother's participation in the business will be somewhat erratic and unpredictable, pay him for his services on an hourly (or daily, or whatever) basis.



Thus at first, your brother gets (1) interest on his loan, plus perhaps some principal payback; and (2) a salary or wage for the time he actually gives to the operation.

This allows a number of things to happen. For one, it'll provide a trial period to see how the chemistry and the working relationship plays out. It'll provide an initial period during which it can be determined just what your brother's role should be; where he's most valuable. It'll give time for him to relocate to Miami and begin working full-time in the biz.

It'll also give all three of you time to see how the profits and cash flows of the business are taking shape.

Then, with benefit of this hindsight, you'll all be in a much better position to decide (1) IF it'll be a good idea to bring your brother on as a partner; and (2) if so, how the profits and responsibilities should be split. Those are difficult questions to answer before you actually begin operations; quite a bit easier to answer after some of the initial uncertainties have been answered.

As I said, this is just one way to go, but it's one approach you might want to add to your list of possibilities.

Congratulations, and best of success with the new venture!

[tmerrill]

If you want to know specifically how to split ownership of a corporation I think we need to know more information. Have you registered your business with your state, Florida in this case? If so, what type of business entity did you register as? Did you register as a C-corporation or an S-corporation? How you split the ownership of your business will depend on which type of entity you registered as. If you don't know what type of entity you registered as, go to www.sunbiz.org - Document Searches (http://sunbiz.org/search.html) (this is your stat's secretary of state, by the way) and search using your company's name.

[BNB]

ArcSine gave very good advice.

I would add to this by saying you desperately need to get an accountant. You most likely don't need any sort of monthly investment for a business your size. But spending a few hundred dollars on a qualified accountant to make sure everything is handled perfectly is well worth the investment.

I tried several times when I was younger... and I would never, ever, think about starting a corporation without a good accountant. Oftentimes they'll even save you money with great advice.