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Me and five other dudes started an advertising agency a year and a half ago. Not sure if it meets the same definition of start that most people use as we're not trying to create a new service or market. It's been a very rough ride thus far. We did it with no loans, none of us had any savings to invest, we had to remove one member of our LLC without the help of an operating agreement, and our lack of any business-y people has led us into quite a few bad decisions. Despite all that, we've done enough work to pay our own salaries (mostly) and overhead. One of our biggest problems has been finding non-creative team people (anyone who actually knows how to run a business, account managers, project managers, etc.) who are willing to take on the risk of joining a fledgling company at lower pay with the incentive of ownership, profit sharing, etc.
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Oct 12, 2011 16:47
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| # ¿ May 15, 2024 21:15 |
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It really, really depends on the statutes in your state. Before this year, Nebraska's LLC statutes were incredibly bad and offered no guidance on what you could or couldn't do. Every lawyer we talked to said that you can't take away someone's ownership unless it's in the operating agreement, and the best thing we could do was close the company, wait a month, and then start a new one. Even doing that he could have filed a lawsuit. That wasn't an option for us as it would have meant essentially giving up on the agency entirely. So, we fell back on verbal agreements we'd all made informally and voted him out. There was no precedent in Nebraska for this sort of thing so it was ripe for a lawsuit and really neither party had a great case. Had it gone to court, I'm guessing he wouldn't have gotten any of the monetary damages he wanted and we wouldn't have been able to remove him from the LLC. Eventually we settled out of court. It didn't cost us too much as the guy is great at making enemies and was being sued for slander by his subsequent employer. Since you haven't actually formed the business yet you might be in an easier position, but some states would consider you a partnership of some kind already just by you all working together. This is one of those questions where you'll really need to see a lawyer familiar with the laws in your area.
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Oct 12, 2011 17:37
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