I am planning to start a solar panels heating, Lighting sales installation and service business with my friends who happened to be own brothers. Right now my would-be partner 1 (Elder brother) is working in Hyderabad India and my other would be partner 2 (younger brother) is working in Gulf. My questions are: 1. How do we set up a partnership agreement, sharewise? 2. NRI can be a working partner or we have to treat him as an investor? If investor what percentage of profit we have to share with him? 3. Who can be a managing director? 4. What should we include in partnership agreement? 5. What other legal issues do I need to consider when starting a business?
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Its better to form a private limited company or an LLP in which the liability of investors would be limited to the shares held.
You would have to sit with some lawyer to share your concerns and legal issues to protect everyone's interest. Unfortunately, you question is very wide therefore, I would recommend you visit a corporate lawyer.
thanks.
you have not mentioned as to who is contributing funds for the business . shares would depend upon contribution made by each partner . in addition please note that if your brothers are working in some organisation they cannot take an active interest in your business .
percentage of share of partner in profits would again depend upon his financial contribution and whether he is taking active part in business . get agreement drafted by lawyer
it should contain following clauses
Name of the firm
2. Nature of the firm's business
3. The principal place of business
4. Duration of partnership, if any
5. Names and addresses of partners.
6. Amount of capital to be contributed by each partner
7. Amount which can be withdrawn by each partner
8. The profit-sharing ratio
9. Rate of interest, if any, on capital and drawings
10. Amount of salary or commission payable to partners
11. Allocation of work among partners
12. Mode of valuation of goodwill
13. Procedure for admission, retirement, etc, of a partner
14. Procedure for maintaining accounts and getting them audited.
15. Procedure to be followed in the event of dissolution of the firm and settlement of accounts
16. Arbitration clause in case of disputes among partners
17. Loans and advances by partners and rate of interest payable on them.. .
the partnership deed should be registered
IThink above is sufficient for your guidance,decide on these parameters and than take up with your lawyer for finalizing the deed.
Mr. Sethi is rightly advise
