My question is not about tax and legal procedures (I'll let my CPA and lawyer handle those), but rather about TRUST.
Trust or... CHECKS & BALANCES.
I am a programmer who owns a small Internet based company that is in dire need to grow... I met this great business developer who has everything that I am lacking (skills in brand building, sales & marketing, networking and... funding).
It seems that together we can be a great team but, once we agree on the partnership terms and I let him run the company (I am not really interested in the headache that involves all the politics and bureaucracy, nor am I good at that), how do I make sure that he is not going to rob me of my hard labor one day?
I have been burnt in the past by two partners who had control over their startup's bank account and while they owed me money and financial reports, they simply laughed at my face, as if to say "sue me" (which is a long and costly process).
So, one lesson I learned from that is that I should not give control over access to the company's bank account and control over critical information to others. But... this is incredibly inefficient and even halting.
Surely there must be a way to solve this, as there are so many companies out there that share control among their partners.
Sure every breach of trust is "solvable" in court, but I would like to believe that the court should be reserved for extreme cases and can be avoided 95% of the time.
What is the secret (of trust / check-and-balances) for those 95% of partnerships?
That sounds easy enough: aim for progressive transition.
Month 1-2: you own 100%, you have sole access to the bank account. See how your potential partner performs.
Month 3: formalize a compensation structure now that you are happy with your partner. Keep control of bank account
Month 6: if you are still happy and trust is in place, release progressive control.
At any step, if your guts tell you something is wrong, abort.
Diligently and gradually. IP/Technicalities shared first -- Finances last.