Updated over 5 years ago on . Most recent reply
Partnership structuring question
Hi,
My wife and I along with her parents recently purchased our first investment property (and got it rented within 5 days whoop).
For ease of purchase and financing - the title of the house and financing is solely in my name but the business intent is for it to be a 75/25 split. We did a full reconciliation of all equity contributions and closing / rental costs and then my in-laws cut me a check to effectively buy their 25% of the business. We intend to purchase additional investments in the coming months and will likely follow a similar process.
We intend to operate as a partnership and we created a general partnership agreement outlining the key terms.
I know the answer is we should talk to a lawyer but is there any drawbacks to structuring the business in this fashion (with titles and loans 100% in my name). I want to make sure my in-laws are comfortable with their investment and that they have some legal right to the assets /liabilities of the business but not sure how to proceed.
Should we look into adding them to the title or put the house in a family trust where the ownership is clearly defined? Any and all thoughts are appreciated!