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  #1  
Old 03-22-2019
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Default Business advice needed about splitting profits, contracts in new company: Car sales.

Okay. I'm looking for some help. I feel like I'm being worked.
A good buddy of mine "BUD" and his bro "B" and wifey "W" have been flipping auctioned cars for about four years unofficially until credit improved for dealer bond. My buddy always wanted to help me out and was there for me to join in on the fun but money was my issue as i just didn't have the initial starting capital.

A few months ago im 40k richer and ready to get in on this.
At the same time, W is approved for bond and business licenses are applied and approved for and verbal agreements are made. The most questionable one being the profits. I know nothing about the legal aspects and business structure when 4 individuals share ideas for starting a company when one person holds the titlement to the company.

We agree on a percentage to profits, of coarse. Me 30%, BUD 30% B and W get the rest.
As of now each one of us have are own money. We buy the cars via internet on B&W' s membership account that is also on B&W 's line of credit, until dlr. license is official.

I'm not profiting on everything being bought and sold because they say my money isn't always good. But yet, they make their profit off of my money that I invest. Please be aware that each one of us does not have more money then the other. I'm still learning so I just help get cars ready for sale. Whether it was bought with part of my money or they bought them with all there money. I don't doubt BUD is making his 30% on each and every sale. He's the one that sells them most the time.

Not everyrhing gets sold right away. Some of them sit awhile. So I end up sitting awhile out of money to further buy more until some are sold. The ones I put in on!

When i hear 30%, i think 30% of everything sold in the company, as a company.

What should I do or handle this, I'm not making very much as my money "isn't always good money" .
What is fair in this company.

Like i said ive never started a business before and it gets real confusing when everyone's your friend. But business is business and an agreement, although a verbal one, doesn't seem right to me. 30% is pretty low when it's my money. If the purchase is paid in full by only me, it's only 30 for me and more for them.

I help get theirs ready for the sale and I'm not getting paid for that. BUD's answer is that he wants me to be there so I learn it all. True. But, i thought we all profit as a company in whole? I don't know.
I

Last edited by okay; 03-23-2019 at 12:04 AM.
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Old 08-19-2019
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Default Re: Business advice needed about splitting profits, contracts in new company: Car sal

To be honest there is no profit for you it all since there is a verbal agreement there is no way you can discuss something that wasn't stated on a piece of paper I'm buying and selling cars by my self its a long process for one single person but its better sometimes just jump in into the pool by yourself and learn all the steps on your own I know for car business it take some time to sell 'em specially when you're at the beginning but some Facebook advertising and some others apps might help and since I'm by my self I don't really get to have more than 3 car sitting while others are giving you profit and I also recommend you to have some type of income because car won't sell quick as you already understood that part...i even pay some one else with the license to get me the cars out of auction any advice just PM me will be glad to help.sorry for punctuation English its my secondary language.
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Old 08-19-2019
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Default Re: Business advice needed about splitting profits, contracts in new company: Car sal

what do you mean by your money sometimes no good?
you did use your money to buy cars ,right?
I think you just committed a cardinal mistake -getting into a business you know nothing about ,and with so called friends ,3 of them who know each other well .
get your money out and do something else on your own.
no dinner for you tonight !
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Old 08-19-2019
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Default Re: Business advice needed about splitting profits, contracts in new company: Car sal

You should have some sort of Operating Agreement for the company. Among other things, the OA clarifies the following:

What the initial contributions will be and how much each member contributed?
What the company will do with its profits and losses?
How the company will make distributions?

I am surprised you didn't put this into writing.

I speak from experience, years ago I was in a partnership where the profits and losses (expenses) were not specifically clarified. it lead to bickering, and some ill will among our partners. Not a healthy thing to be doing when you are trying to run a business.
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Old 08-19-2019
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Default Re: Business advice needed about splitting profits, contracts in new company: Car sal

Quote:
Originally Posted by agent006140 View Post
what do you mean by your money sometimes no good?
you did use your money to buy cars ,right?
I think you just committed a cardinal mistake -getting into a business you know nothing about ,and with so called friends ,3 of them who know each other well .
get your money out and do something else on your own.
no dinner for you tonight !
Couldn't have said it better.

Where is your OA or Partnership Agreement?

I don't see this ending well. Time for a re-do.
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Old 08-20-2019
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Default Re: Business advice needed about splitting profits, contracts in new company: Car sal

even with contract,it would cost money to get a lawyer .
There are plenty of starving lawyers out there,
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Old 08-20-2019
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Default Re: Business advice needed about splitting profits, contracts in new company: Car sal

40K is not small change,you can start an ecommerce business on your own.
I just went to a local jewelry shop which repairs high end watches ,the place is empty yo know the story,no one goes to store anymore to buy their gold coin,gold chain.
But he has this guy in a corner repairing high end wrist watches,we start talking and he told me he found high end European pocket watches and fix them and sell them for high dollars .
High dollars are 5 figures ,he knows what he is looking for and he can fix them if needed.
So there you go, a nice side business!
so what is your interest?

Last edited by agent006140; 08-20-2019 at 05:35 PM.
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