Legal Question in Business Law in New Jersey

Re: Incorporation with multiple partners

Unless you like the idea of appearing in criminal court, you should enlist the services of a business lawyer to help. Any time an ownership interest in a business entity is offered in a context other then a strictly private offer, the prospect of invoking both State and federal securities laws arises. You said that you intended to "recruit" (a public offer) new partners to work for "sweat equity" (an owhership interest). If you do that wrong and anyone, including the Attorney General, is dissatisfied with what you have done, you could wind up with no business and a lot of criminal charges and lawsuits. Some of these ideas can be made to work, but don't do it yourself. Get the help of a business lawyer who may then point you in the direction of someone who handles public offerings.

See also: http://info.corbettlaw.net/lawguru.htm

Re: Incorporation with multiple partners

You would have to have an attorney draft a shareholder agreement that addresses capital contribution such as money or sweat equity.

Mike.

Re: Incorporation with multiple partners

If the owners want to provide actual ownership interest to the recruited people, they'll need to determine how they want their ownership interests diluted. There are other options aside from giving outright owner ship to the recruits, however, which may not require actual assignment of company ownership.

If you'd like to discuss the various options, please feel free to contact my office.

Re: Incorporation with multiple partners

This has a LOT of ways to go wrong.

Hire a good business attorney and keep you all moving smoothly. And if you do disagree, you will have a mechanism to resolve the conflicts and keep your business going.

If you would like me to help you, please give me a call; I am in Hackensack (northern New Jersey). My contact information can be obtained from the links below, just click on the Attorney Profile link. Let my secretary know you found me through LawGuru.

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