Adding a new partner to a business ?

[fixmytax]

Hi

I have the following question. Person A is running a small business (sole proprietor, the business is not yet registered) and person B are interested to purchase a 50% share in the business. The intention is also that both parties will contribute equally to the business and also share profits 50/50.


In order to get this done, should the business first be registered as a company or a partnership? Where can I get a sample agreement/contract template I can use for this ?

Thanks

[Justloadit]

I would suggest to register a company, each partner with 50%.
If you google "partnership agreements" there is a vast list to choose from.

Most important is to state what each partner's duty is, what he is required/expected to do, and what they will be paid to do it, and when they will be paid. Please be very detailed, so that there is no misunderstanding!
Next what will happen if the partner does not do what is required or absconds. That is the divorce, when things do not go according to the initial plan as agreed by the partners.
Next who handles the finances, and if both are active in the release of funds, what to do when one partner is not available to release the funds.
Another point is the agreement of who is allowed to employ in future, and who may be employed, nepotism is very strong here in my mind, as it is always difficult to fire the wife/brother/son/father/in law, nephew, insert here what you can think off.
Once you pass this hurdle, the rest is easy.

[yuhuawei]

I would suggest to register a company, each partner with 50%.
If you google "partnership agreements" there is a vast list to choose from.

Most important is to state what each partner's duty is, what he is required/expected to do, and what they will be paid to do it, and when they will be paid. Please be very detailed, so that there is no misunderstanding!
Next what will happen if the partner does not do what is required or absconds. That is the divorce, when things do not go according to the initial plan as agreed by the partners.
Next who handles the finances, and if both are active in the release of funds, what to do when one partner is not available to release the funds.
Another point is the agreement of who is allowed to employ in future, and who may be employed, nepotism is very strong here in my mind, as it is always difficult to fire the wife/brother/son/father/in law, nephew, insert here what you can think off.
Once you pass this hurdle, the rest is easy.

This is clear ! thank you