Forming a partnership

[SarcasticDwarf]

I'm looking at forming a partnership with another person to own/run a website. I've got a few questions as to how a partnership works when all the assets are online and can't have a real value.

Please note, the website it not really a business. This is two people that run hobby sites that would merge into one. When the site was created, there were some conditions laid out. I don't think the site can actually be sold (or if it was, most of the value would be removed first (all user accounts, all ratings, all reviews, all comments). So the site does have value. I think if there were a partnership, and one person wanted to buy out the other, I might legally be able to do that, not positive though.


If the partnership is dissolved, what is done with the assets? There is no way that it could be split up, and selling it to a third party would not work. I'm guessing that neither of us would be able to afford to buy out the other person's half, considering everything.

How do you make sure that each partner contributes equally (in terms of time, effort).

 

[SarcasticDwarf]

?

 

[badmouse]

From a business/legal point of view, if there isn't any value, they aren't assets.

Can you clarify a bit? My guess is that you are talking about your membership and your mailing list?

 

[SarcasticDwarf]

Originally posted by: badmouse
From a business/legal point of view, if there isn't any value, they aren't assets.

Can you clarify a bit? My guess is that you are talking about your membership and your mailing list?

When the site was created, there were some conditions laid out. I don't think the site can actually be sold (or if it was, most of the value would be removed first (all user accounts, all ratings, all reviews, all comments). So the site does have value. I think if there were a partnership, and one person wanted to buy out the other, I might legally be able to do that, not positive though.

 

[SarcasticDwarf]

...

 

[necine]

Care to become a part owner of littlehoochies.com?

It has potential.

 

[neit]

This seems like something you should consult with a lawyer =)

 

[shilala]

I own a website with a partner.
The assets lie in the earning capacity.
Bills are paid and whatever is left is what is split up.

The site would not continue to exist without both of us, or at least not like it does now.
The software is so fvcked that no one else would tolerate it.

If we did sell it, we'd simply split the take. If one would buy the other out (which would likely never happen) then the guy left holding the keys would simply take care of all the grief and send the other guy money. I don't see that scenario ever playing out.

The one thing that stands out in this is that my partner is of a moral fiber so high that I can trust him with anything, and trust his judgement above mine. We always discuss, but if we disagree I defer to his judgement.
Make sure you have a partner you can trust like that.
If you don't, don't get involved.
If you do, your original question becomes a moot point.

 

[SarcasticDwarf]

Originally posted by: shilala
I own a website with a partner.
The assets lie in the earning capacity.
Bills are paid and whatever is left is what is split up.

The site would not continue to exist without both of us, or at least not like it does now.
The software is so fvcked that no one else would tolerate it.

If we did sell it, we'd simply split the take. If one would buy the other out (which would likely never happen) then the guy left holding the keys would simply take care of all the grief and send the other guy money. I don't see that scenario ever playing out.

The one thing that stands out in this is that my partner is of a moral fiber so high that I can trust him with anything, and trust his judgement above mine. We always discuss, but if we disagree I defer to his judgement.
Make sure you have a partner you can trust like that.
If you don't, don't get involved.
If you do, your original question becomes a moot point.

Thank you very much for your advice. Do you tend to split the day to day duties and then overlap with decision making? How do you manage that? In my case as well the code is so jacked that nobody in their right mind wants to touch it.

 

[SarcasticDwarf]

Originally posted by: shahbazq
This seems like something you should consult with a lawyer =)

I will, but figure that the cost of consulting with the lawyer is going to cost a years worth of income and the income only covers the bills right now.

 

[JulesMaximus]

There is no such thing as online assets. There is goodwill though.

If the partnership is dissolved it would be according the original agreement that was signed or split equally.

You should have an accountant evaluate your business prior to liquidation or selling to make sure you don't get screwed.

 

[shilala]

Originally posted by: SarcasticDwarf

Originally posted by: shilala
I own a website with a partner.
The assets lie in the earning capacity.
Bills are paid and whatever is left is what is split up.

The site would not continue to exist without both of us, or at least not like it does now.
The software is so fvcked that no one else would tolerate it.

If we did sell it, we'd simply split the take. If one would buy the other out (which would likely never happen) then the guy left holding the keys would simply take care of all the grief and send the other guy money. I don't see that scenario ever playing out.

The one thing that stands out in this is that my partner is of a moral fiber so high that I can trust him with anything, and trust his judgement above mine. We always discuss, but if we disagree I defer to his judgement.
Make sure you have a partner you can trust like that.
If you don't, don't get involved.
If you do, your original question becomes a moot point.

Thank you very much for your advice. Do you tend to split the day to day duties and then overlap with decision making? How do you manage that? In my case as well the code is so jacked that nobody in their right mind wants to touch it.

My partner does the billing and day to day operation of the website. He takes care of issues when it shyts the bed.
I take care of all the customer service, mediation and account credits.
We've been at it so long that there aren't really any decisions to be made.

If there's a moral dilemma in customer service that I'm on the fence about, I forward the situation to him and ask him to copy me on it with his reply.
If he doesn't want to make the call, he sends it back to me and I take care of it however I please and copy him. That sets precedent and it's how we forge "the rules".

I mentioned the decision making earlier.
In a partnership their can't be opportunity for loggerheads. Sooner or later someone won't agree with something.
In the beginning I agreed to take a backseat if we came to that point on any issue.
I don't think we've ever come to that point, but if it did, I'd concede.
The "day to day" decision making belongs to the person who is responsible for that part of the workload.

 

[rmrf]

Originally posted by: shilala
I own a website with a partner.
The assets lie in the earning capacity.
Bills are paid and whatever is left is what is split up.

The site would not continue to exist without both of us, or at least not like it does now.
The software is so fvcked that no one else would tolerate it.

If we did sell it, we'd simply split the take. If one would buy the other out (which would likely never happen) then the guy left holding the keys would simply take care of all the grief and send the other guy money. I don't see that scenario ever playing out.

The one thing that stands out in this is that my partner is of a moral fiber so high that I can trust him with anything, and trust his judgement above mine. We always discuss, but if we disagree I defer to his judgement.
Make sure you have a partner you can trust like that.
If you don't, don't get involved.
If you do, your original question becomes a moot point.

That's funny. I'm in the exact same situation. I also own a website with someone. I do all of the server side things, as well as host the server, and does a majority of the programming. I think if it ever came down to a tough decision of some sort, his would override because I trust him more than myself.

I guess it is a little different though, we have a website, but our main focus is software development. So there is something "tangible" there that could be sold.

btw, how did you get advertising for your site? I noticed you had a couple different ads on there. Did you have to go to those companies and ask if they wanted to advertise, or did they come to you asking for space? That's something that I've been interested in doing, but haven't.