Legal Question in Business Law in Massachusetts

How do I setup my investment firm with my current colleague, so that we can continue our current situation of operating different financial planning practices, but sharing a common name for marketing sake?

To provide a bit more information - My colleague and I currently own two separate financial planning practices at the same Broker dealer. Income and most expenses are separate, the only thing that is shares is office space and a common staff person. We currently both pay our shared staff 30% of of each of our own net incomes. In all intents and purposes, the staff person is a 30% partner in each of our business, but holds no ownership in our practices, just a salary absed on cashflow. We plan on leaving our current Broker Dealer and open an RIA firm under the same name. We would like to use the same name because of more favorable pricing and marketing/website efforts. The problem is that we do not make the same amount of money and it would be difficult to asign a starting percentage ownership to an LLC with different payouts due to unknown annual incomes which are highly dependant upon market performance and client aquisition. Our main goal is to flow our individual incomes and expenses through the same business name, with one of those expenses being 30% of our net income to our shared staff. How is this done? We are willing to form a separate corporation for our staff person and have our business have a consulting agreement with his corporation to pay 30% of each of our individual incomes, but dont know if this is allowed. Please help! Thanks!

R


Asked on 3/13/11, 3:44 pm

1 Answer from Attorneys

The answer to the question is too complex to answer in a forum such as this. You could set up a joint marketing agreement or marketing your services but both LLCs would be liable for any malpractice of the other. There are some more detailed and slightly more complex solutions to your problem, but more information as to the specific kinds of practice each of you has.

I would be happy to meet with you without obligation. Please call me Monday afternoon to discuss the matter without obligation.

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Answered on 3/13/11, 4:24 pm


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