Legal Question in Business Law in Texas

Re: Partnership

In lieu of a contract, I would suggest your forming a company. You can get a lawyer to put together a simple corporation or LLC for you for a few hundred dollars, plus filing fees. This way, you are assured that everything is done properly, and you have a company to handle your business as well.

Re: Partnership

The simple answer is to hire a lawyer and get it done right. That will cost hundreds to thousands of dollars. If the business isn't worth that, don't bother with it.

If you don't have the money to use a lawyer, you should still write down your joint understanding of your relationship. And, as soon as you have a little money, go to the lawyer and "get it done right." Don't wait.

Even with a lawyer, you have a problem with your deal: you say you will split profits, but you don't talk about losses, cash flow, who will do what, etc. You seem to leave that under the "I trust him" category. Problem is that trust isn't communication of expectations, which is the key to retaining the trust you now have and must preserve to make the website a company.

A writing you both author and sign is crucial to address whether you both have the same expectation of each other and what you will do if things don't go the way you expect them to. If you can't make that writing together, you will likely not be able to work together in the long run. For example, who will do what work? Who will pay for the web site? Who will design the logo? Who is going to handle the money? Will it be in a that person's checking account or a new one for the "business?� Is this going to be part time for one or both of you? How much effort do you expect from each other, and how will you measure that? Are both of you responsible for all of the debts of your partnership, or is one of you more like an employee who gets a bonus if the revenue is high but doesn't have to pay bills if the revenue is low?

Lots of other questions to ask each other to avoid loss of that necessary trust you now have and must preserve. Even a lawyer "doing it right" for you can't fix that -- you will need lots of communication about things that one or both of you won't really want to discuss.

Good luck with the new venture.