How to properly form a company with 3 partners.
I hope everyone is well! I was curious to see how I could go about setting up this company I have in mind. There are 3 partners. 2 partners with an MLO, and real estate license. We also have a partner with a GC license. The primary goal is to flip properties until we hit a certain level of cash. Once we hit that level we will start developing land. For all of the projects we will be using our GC's company for the repairs. They will be doing all of the renovations at a whole sale price. How would you go about structuring the company? How would you determine each persons percentage of payout they should receive? The other 2 partners would be writing the loans and selling the properties, finding deals, and bringing a majority of the cash to the table.
Hi Zachary,
With the volume you are speaking of, it seems forming as an S corp may be your best bet. You would split the stocks accordingly based on how you would want to split profit. It also has the benefit, in your case where one or more shareholders has to have a paycheck on top of their share of profits, so they can get a paycheck for any extra work they do above and beyond. However, it is hard to give a completely definite answer without knowing all of the intimate details. Luckily, business formation is something I specialize in, so feel free to contact me if you would like to speak in detail