Another person and I want to work together to create and sell a new software program. He has the industry knowledge and I am the programmer.
We are considering forming a partnership but I've been reading about that and I'm concerned about the fact that partners are personally liable for debts incurred by their partners. I hope to do this with other industry experts in various fields, creating various software programs, and I don't want to end up partnering with a scoundrel who buys a car in the name of the partnership and then disappears with it.
I see that there are limited liability partnerships, but we want to keep this simple with minimal capital costs (we'll just market the program as shareware), and a limited liability partnership would apparently require that we have insurance and pay the costs of creating a corporate entity. I've already brought three programs to market with zero capital costs over the last 8 years (except for the business license), and we plan do the same with this new program. The requirements of limited liability partnerships seems out of proportion to what we're trying to do, at least until when and if the program starts earning a lot of money, which of course may never happen.
What about just creating a contract that documents our agreement? Would there be a problem with that? For example, it could document:
-- each of our responsibilities.
-- each of our percentages of ownership and profit sharing in the software program.
-- that each party is fully responsible for any debt or obligation that party incurs, unless specifically agreed otherwise in an addendum.
There would be more details of course, but those are the main points.
Since there would be no partnership per se, there would be no partnership entity to incur debts, no checks in the name of a partnership, etc.
Any thoughts?
We are considering forming a partnership but I've been reading about that and I'm concerned about the fact that partners are personally liable for debts incurred by their partners. I hope to do this with other industry experts in various fields, creating various software programs, and I don't want to end up partnering with a scoundrel who buys a car in the name of the partnership and then disappears with it.
I see that there are limited liability partnerships, but we want to keep this simple with minimal capital costs (we'll just market the program as shareware), and a limited liability partnership would apparently require that we have insurance and pay the costs of creating a corporate entity. I've already brought three programs to market with zero capital costs over the last 8 years (except for the business license), and we plan do the same with this new program. The requirements of limited liability partnerships seems out of proportion to what we're trying to do, at least until when and if the program starts earning a lot of money, which of course may never happen.
What about just creating a contract that documents our agreement? Would there be a problem with that? For example, it could document:
-- each of our responsibilities.
-- each of our percentages of ownership and profit sharing in the software program.
-- that each party is fully responsible for any debt or obligation that party incurs, unless specifically agreed otherwise in an addendum.
There would be more details of course, but those are the main points.
Since there would be no partnership per se, there would be no partnership entity to incur debts, no checks in the name of a partnership, etc.
Any thoughts?
