Hello to all...
I am looking at joining forces with another company. I do video production and he handles all the paper ads and billboard creation (graphic designer). We both love what we do and we both have the same attitude and work ethic. We want to rent a building together and in a sense make an "ad agency" of sorts. We plan to add on a web developer once we find one who we would like to work with us. We aren't combining companies i.e. mine will stay Obernesser Productions, his stays under his title but we are under one roof and working together on projects. Has anyone done this before and have advise? Do we need to create a new LLC or something to that affect, or can we just create a name and stay separate?
Thanks for all and any advise!
The easiest thing to do would be to just keep your companies separate. You can operate under some "umbrella name" that is really no legal entity, just what you "call yourselves." Invoices would still be written from and checks written to your repective companies.
If you are doing a job for a client where you are both doing about half of the work each, then bill the client separately.
If on the other hand, you are doing a job that is greatly one-sided (say, it's 90% video with just a smidge of print), then I'd do the job entirely as a gig with your company, then YOU just sub out the print stuff to your pseudo-partner (and vice versa, if a job is more print heavy than video). That will be invoicing simpler for the client.
I think I would operate that way for a while, it's a "living together" period before the marriage... that way you can see if you and your partner really do fit together as well as you think, exactly what assets each of you bring (both phyical capital assests, as well as the intangible ones such as client contacts), learn what client needs are, etc. If it seems to be a beautiful partnership, then some time down the road you can form an "official" company under the umbrella name and work that way.
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You might heed Todd's advice, and also consider leasing some office space in a corporate suite setting. Most cities have an office building that will lease you offices, and you get the use of copy machines, fax, kitchen, conference room and the receptionist - without the overhead of renting a place, paying taxes, utilities, buying furniture, etc.
Many years ago (1984), during my automotive business days, I did the same thing with a very good friend. I built engines and drive trains and he did body work. We rented two adjoining spaces in an industrial park and cut a large doorway between the two.
We got a deal by renting two spots and he was there a week before we got married so we decided that I would pay him my half of the rent and he would write one check. This worked really well until he had financial problems and then, one day, the land lord came strolling through with an eviction notice. It seems like there were 60 days of late rent notices that I never saw. The next day, my doors were locked and I had to come up with $3,000 to get my doors opened. The only thing that saved my tail was my cancelled checks for my half of the rent. This proved that I attempted to pay the rent.
I still partner a lot of jobs with other companies and I'm a lot more careful about things now.
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