Forums: Discussions for entrepreneurs and small business.

We are looking to give one of our partners 20% of our company, is there any paperwork that needs to be filed with the state of Michigan or the Fed’s. If so does anyone know what form # or name is the correct one to use. We are looking to use the partners credit to secure SBA funding, but the bank said they need proof that he owns 20% and is the only individual who owns 20% or more.  Can anyone help with that.

Crystal guy-

You don`t say what type of structure you have for the business - but generally the State wants to be notified about ownership changes.

I wouldn`t give someone 20% of the company just to get a good credit rating on an SBA application. There are other better ways to get that done.

Also, telling the SBA / and bank that your partner is the only one who owns 20% of the company may create some real headaches for all of you!

 

Robert Johnson

 

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

OK More info.

We are a C Corp for profit.

the wife owns 16% of the total stock, but all of the common stock we are giving preferred stock to a friend of ours. the preferred stock has no voting rights, he refused the stock the first time I offered it to him (while the two of us were working on the road together for the company we are competing with) But his future depends on us starting this business up and he is willing to do what it takes to get it done, because he knows the potential of what we are doing.

My customers are College Student activity councils and will not invest or prepay for shows. I have a letter of intent from my agent claiming he can and will book the events but need to have the equipment to get him to sign contracts with the schools.

CrystalGuy,

I assume from your message that the wife owns 16% of all the stock authorized. If she is the only one holding shares of common stock - then she "owns" the company- in the eyes of the SBA.

If you want ot get into more detail about your  specific situation -we shoule take this "off line"

Contact me directly = robert@bizgrowthmasters.com

Robert Johnson

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com