Originally Posted by AlohaMowing
I am a big believer in LLCs to provide protection against personal liability. But bear in mind that the finances become more complicated with an LLC. You need to keep the LLC assets separate from personal assets. Do dipping into petty cash to buy something that is not for the business. And you would transfer your equipment to the LLC. Some people think an LLC eliminates the need for insurance--it does not, one still needs to have sufficient insurance, or assets, to cover any foreseeable claims that might arise against the LLC. There is nothing wrong with a dba or sole proprietorship so long as you have sufficient liability insurance. There are pros and cons of both. (I have 2 businesses, one is an LLC, the other a sole proprietorship, and feel that each one is the right type for the particular business.)
I would contact customers to explain the name change and let them know your former partner has left the business to pursue other opportunities.
One thing you said caught my eye -- you said he "wanted to take half of what we made . . . ." If you were partners, unless you had an agreement specifying that you were not equal partners, he would have been entitled to 50%. Probably not an issue, but be aware that it could be something that comes up to bite you if your ex partner gets mad. And keep in mind that your customer list remains property of the partnership. Be sure to offer a copy of it and all other documents to your ex partner. If he wants to solicit business from your customers, be sure you let him do so as freely as you want to do.
My ex partner has zero interest in doing it any more. He basically wants a 9-5 job making $15-$20 an hour. He wasn't a morning person. By the time he rolled out of bed and we got going, we didn't get to our first lawn until about 9/9:30. Then he wanted to be back by 5/6:00. He lives with his parents, has nothing and screwed around half if the time.
I addressed this to him at the conclusion of last season and he didn't care so a few weeks ago when I wanted to discuss the upcoming season he said he wasn't interested and wanted nothing to do with it. So over this past weekend we agreed to part ways. He wants to get a job as a carpenters helper. My guess is that he doesn't want the responsibility of running a business and just wants to collect a check every week. So on Monday, we filed the paperwork to dissolve the business. I gave him a nice chunk of change for his half of the equipment that he helped pay for and he signed a no compete letter. I have an appointment with my lawyer on Friday to file the necessary paperwork for an LLC. It was my lawyers advise to go with an LLC. I already have a letter made up for my customers about the change and I don't think I should have any problems with keeping them since they already know me and that I was also the one who did all of the admin work and phone calls, billing etc. I am really looking forward to going at this solo. I can run things my way without worrying about butting heads with someone.
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