Legal Question in Business Law in Ohio

Re: purchase/partnership agreements

Dear Risk Venturer: DON'T DO IT!!! Do not risk even one thin dime of your investment without the protection of a written, signed agreement, detailing all the "what ifs?" which only an experienced Attorney can prepare.

Protect yourself at every stage. Remember, a partnership binds each partner for the obligations, debts, mistakes, and illegalities, etc. of the other. You had better consider an LLC or S Corp. arrangement, a partnership is very dangerous! Tread carefully or risk serious problems. An experienced Attorney can explain why these forms of business entities are immeasurably safer. Retain counsel ASAP!

Good luck!

Sincerely, J. Norman Stark

Re: purchase/partnership agreements

It is not unusual for a seller to ask for some type of earnest money before negotiating a purchase agreement. The seller may want to insure the commitment level before spending the time or hiring an attorney to draft the purchase agreement. On the other hand, you as the purchaser may also want to guarantee a commitment level or certain terms or a period of exclusive dealing. These issues can be handled in a written Letter of Intent, or similar document. Each side agrees to certain intentions and possibly binding aspects. Then, the parties negotiate the purchase agreeement. I would advise you to contact an attorney prior to committing to anything or putting any money down. Your attorney can advise you on the reasonable level of earnest money, how to protect the deposit and what provisions or commitments you should ask for in exchange. I would be weary of any situation you are asked to put money in without having some agreement in writing.