Suhas Kamble (Director) 11 October 2010

Partnering with UK pvt ltd firm

Hi,

I have been workng with UK firm on a contract (percentage on sale value). This is good contract for me as it is direct % on sale.

The company is based in UK and we have no sale sor last 8 months. The products are different softwares which we all think have good potential so invested significant time in development and now we are focusing on sale.

The UK firm is private ltd and head by one person and no other employee, he works from home. He want to secure his position by making me a partner into the firm. He has checked and it is easy as well as legal to appoint non british person as partner. To me the benefit in this case is I get profit share in other products of the company (although no sale in last 2 yrs for those products too).

I am bit affraid into getting into this, solely because I am unaware of consequences of getting into this kind of business deal. I am always thinking of haveing somethink similar my current contract and I should be able to pour money into business gradually. He is insisting me to partner, I know he is good and trustwirthy. I have been cheated for a huge in my last partnership with Pune based firm(with my good friends), so I am playing safe.

Please suggest.

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3 Replies

darshana sawant (associate consultant) 11 October 2010

I think you should ask for the balance sheet and secure the financial sound footing of the company before you proceed on any count. Because partner in profits will also mean partner in losses. so you need to take due precaution. In addition other liabilities on account UK laws also need to be examined.

(Guest)

KINDLY NOTE THAT PARTNERSHIP IS VERY RISKY FORM OF DOING THE BUSINESS.YOU AS A PARTNER WILL BE JOINTLY AND SEVERALY RESPONSIBLE FOR PROFITS AS WELL AS ENTIRE LOSSES OF THE FIRM .AND AS THE OTHER SIDE IS IN U.K.YOU SHOULD STUDY THE LOCAL LAWS FIRST REGARDING PARTNERSHIP AND THEN WITH THE HELP OF LEGAL EXPERTS GET LEGAL OPENION AND TAKE APPROPRIATE DECISION. KINDLY NOTE THAT ANY AGREEMENT THOUGH REGISTERED IN INDIA IF IT IS NOT REGISTERED IN FOREIGN COUNTRY AS PER THEIR LOCAL LAW PROVISIONS THEN IT IS VERY RISKY FOR IMPLEMENTING THE AGREEMENT PLEASE NOTE.

GOOD LUCK.