Legal Question in Business Law in California

Joint Venture vs. new LLC

A colleague and I have started a new website that has been profitable for some time now and we want to form a legal entity of some kind to ensure we both have legal ownership and so that we both ensure an equal income. Naturally, we initially thought of forming a new LLC around the website of which we would both be co-owners. However, my business partner already has an LLC that he wants to keep money flowing into for tax and credit purposes (I don't currently have an LLC). He doesn't want to form a new LLC which would divert that income away from his current LLC. Therefore, he's suggested a Joint Venture (assuming I form a new LLC for myself, and he maintains his current LLC). Is a Joint Venture between two LLCs something that can assure co-ownership of the website and profits? Can we establish similar business clauses in our agreement as we would with an LLC?

Thank you,

Josh

Los Angeles, CA


Asked on 9/10/09, 1:26 pm

2 Answers from Attorneys
Bryan C. Becker Your Lawyer for Life.

Creating your own LLC and then entering into a joint venture would be an option to accomplish this. I suggest you have an attorney review your current business structure and goals in order to ensure this is done correctly. It is worth the time and expense to do this the right way, otherwise it will cost you much more time and money should things not go well down the road. If you would like assistance, feel free to contact me. Our small buisness start-up package is both affordable and comprehensive.

Yours truly,

Bryan

619.400.4929

[email protected]

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Answered on 9/10/09, 2:10 pm
Bruce Beal Beal Business Law

I would recommend that one entity, rather than two new entities, be employed to meet the goals of providing limited liability to you and keep his LLC intact. Merely organize an LLC for the website business in which you individually are a 50% owner, and his LLC is a 50% owner.

If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided by LawGuru or through my firm�s website located at BealBusinessLaw.com.

The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. Each matter has differing facts. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.

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Answered on 9/23/09, 2:31 pm


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