This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
Hello! I am new to the forums, but I can already tell this is a great community.
I am a partner in a start-up apparel company and am quite naive with the business side of things. My role is the artist/designer for all of our garments - However, as a partner in the company I will be taking a percentage of all profits.
Thus far, all the agreements made have been verbal. The head of the company has given me the run-around regarding the time it is taking to set us up as a corporation. Trademarking has been taken care of, as well as our RN# etc. but I have yet to see or sign any contracts. I would like a little ammo to bring to the table next time we meet - as far as the type of things to watch out for (so I am not taken advantage of!) I am being pressured to hand over artwork, and as eager as I am to get our first samples made, I'd like to sign something! Should I be worried about handing over artwork at this point and if so, is there some type of contract I should have drawn up to protect myself/artwork?
The research I have been able to come up with state things like, "the employer owns the artwork - but only if the artist has been paid." We have investors - but I don't expect to be paid for the artwork until we start to turn a profit. As a partner, am I technically an employee to someone with a larger percentage held in the company?
It seems like this community is knowledgeable about these types of questions. Any advice or links to other posts regarding these "fears" would be greatly appreciated! Thanks in advance!
I Really we could all give you our opinions and they would be just that. I think you need legal advice to get things going in the right direction I advise you to find a attorney to get things on track. I think you need to have someone looking out for your interest and the money spent would be well worth it to you over time. I wish you the best of luck. .... JB
Rockclimber, I agree with JB. This seems too big to go in unprepared. It could deeply affect your future for years to come. Get a lawyer, someone who is a lawyer/CPA would be perfect, but get a pro to look out for you. It'll be an investment that will payoff for years to come.
There is a member here called Novanutcase, and I believe he may have some good words of wisdow for you. Maybe send him a pm, but that is not advice to substitute for the pro on your side. I think John (novanutcase) could give you great direction in what you will be asking the lawyer and/or CPA to do for you, and to make sure you get your money's worth out of them as well.
I would say that Coed and Kelly have pretty much nailed it on the head. Remember, best laid plans......
First of all, if no corporate agreement has been filed stating that you are a shareholder in the company then, at this point, you have nothing. In your corporate agreement it should state what it is you are entitled to and how the assets will be disbursed.
I wouldn't give any artwork away until I know that all the i's have been dotted and the t's have been crossed.
Of course, this is just my opinion and shouldn't be construed as legal advice. You need to go talk to a lawyer that has YOUR intrest in mind so that you get a fair deal!
I will certainly seek some legal advice - Do the things I brought up in my original post sound like the right kind of questions to bring to a lawyer? I want to be sure I get my moneys worth when speaking to one.
I will certainly seek some legal advice - Do the things I brought up in my original post sound like the right kind of questions to bring to a lawyer? I want to be sure I get my moneys worth when speaking to one.
Again, Thank you!
Yup! Any attorney worth his salt(Is there such a thing?!?) will probably ask you more questions than you him.
I will certainly seek some legal advice - Do the things I brought up in my original post sound like the right kind of questions to bring to a lawyer? I want to be sure I get my moneys worth when speaking to one.
Yup.. If you have email conversations with your business partners, bring those in too.
Make sure you talk to a lawyer who specializes in business contracts, partnership agreements, etc. Almost any lawyer can advise you on these things but if you get someone who specializes in them you will save some time. And small firms are usually cheaper (less overhead).
I agree any type of correspondence you have,or anything you can remember write it down. The more info the Attorney has the more qualified the answer can be. ... JB
I agree with all postings listed above. Just remember, there needs to be a clear distinction between being a partner/owner/shareholder and that of an employee. Often you will be both a partner and an employee, but each role comes with different rights and obligations. I would suggest that you get the professional advice, legal with accountancy background would be ideal. But think about what you expect as a partner (your obligation is to the best interests of the company) and what you expect as an employee (wages etc.?).
I wouldn't hand over any artwork unless you have it in writing what the implications of doing so are.
Good luck, I look forward to hearing the outcome. I'm the money spent will be compensated by less friction and heartache of going into a situation and not being prepared. .... JB
Good luck, I look forward to hearing the outcome. I'm the money spent will be compensated by less friction and heartache of going into a situation and not being prepared. .... JB
I've seen so many companies go down in flames because it wasn't clear from the beginning what everyones responsibilties and disbursements were going to be.
The honeymoon stage of any business is always rosy. It's when things start to go sideways that make for a harrowing experience.
And of course if they get huffy and aren't interested in signing then it may be time to walk away.. Don't feel pressured in to "seeing" how things go etc. Remember if both parties agree then terminating a contract is not difficult, however after the fact trying to prove a verbal/gentleman's agreement satisfactorily will not only prove very expensive but quite difficult.
Don't be afraid to suggest (no doubt your lawyer will anyway) that the signing etc be done at his office so if they have any questions (they should really consult their own lawyer to look through it on their behalf) can be answered on the day, and any amendments needed/agreed upon can be changed then and there. It then just becomes a formality rather than you "getting lawyered" up against them.
partner vs. employee 
Re: partner vs. employee 
) will probably ask you more questions than you him.
