I am seeking input and advice from those experienced in business partnerships.As the sole owner of an S-Corp that currently offers residential general contracting and electrical services, I have decided to take on a 50% partner. This partner has been a trusted and highly skilled employee for almost 20 years and has helped me build this business to where it is today. In the future, we would like to simplify this business and move away from general contracting and dealing with the erratic nature of clients under construction, unreliable subcontractors, and other such problems related to being a general contractor, and transition into a single trade, particularly electrical contracting. Our focus in the past has been on general contracting and we have not specifically focused on building up the electrical business, other than self-performing the electrical work on our own projects. That said, we are going to keep the general contracting business alive for now to help fund the electrical contracting business. I have offered a buy in of the assets only since my partner has been crucial in helping to build this business through his hard work and loyalty. These assets are transferable to the new electrical contracting business (ie, vans, tools, ladders, etc…). We are planning on then forming another corporation under a different brand to offer electrical services. I will be handling the back office including accounting, sales/marketing, estimating, design, client relations and high level project management, as well as jumping into the field when necessary. My partner will be in charge of production and most of his time will be spent working in the field overseeing one employee initially, until we are able to add more employees and he moves up into more of a project management role.My questions are; What is the best compensation scheme for us as partners so neither of us feel taken advantage of? And what do we do during lean times when there may not be enough money to draw a salary? Or worse when the company needs an infusion of cash?
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