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I need assistance in preparing a business partnership agreement for my patented product line

Hello and Thanks in advance for any help you may be able to offer.

I'm very excited to have someone who is highly skilled working on my product line. She is willing to work for free, and in turn would like some sort of business agreement drawn up reflecting her skills to be used in this effort, along with milestones within the company, and it's monetary value. She is looking to be with the company long term but also would like ( eventually) a buy out option once the concept is successful. I am very flattered that she is one of the few people who are willing to dedicate their time on something with no reward until many huge hurdles are conquered. I want this agreement to reflect that appreciation. I only have Shark Tank percentages to go by, and those are always tied to the money they invest, not just their skills.

There are ZERO sales now, as I am still in product development mode. I do have working samples, and the concept is tested/proven.

So I need someone to help identify her value within the business, and how to extend value to her for believing in this concept and being willing to put in the work to get this to market. At this time, I do not believe she will be assisting monetarily in any way. Her contributions will be more on the product development side and has extensive experience in the shoe industry. I will still be handling marketing, web site development and costs, video production and it's costs. Crowdfunding campaigns and it's related marketing. She has a lot of very useful connections as well, which will add increasing value to all my efforts in those categories. Obviously, I have worked hard to get where I am, and the patent was all my hard work, and she doesn't want any of that glory. She's ready to dig her heels in, and I want an agreement that if YOU were the person offering these efforts, what would you believe to be fair and worth those continuing efforts?

Many thanks, Elizabeth

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It is vital to protect your intellectual property and clearly define your ownership role and that of your prospective partner with an operating agreement. The operating agreement is a natural by-product of a business plan you develop together as you decide what type of company you wish to register with the State of Illinois and with the IRS.

The agreed upon ownership % should be specified in an operating agreement. Your equity arrangements as well as many other important factors will evolve by developing a business plan and an operating agreement as a team.

Develop a business plan together using the below tool kit:

https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan

https://www.bplans.com/sample_business_plans.php

Then develop the operating agreement, which is a separate document, not controlled or required by the state or the federal government, but very important to your company. It should be a simple, straightforward document you and your prospective partner can draft yourselves, addressing such matters as % of ownership, how revenue will be distributed and other general matters, as well as who can commit the company in the form of credit cards, who signs checks on the company account and other administrative matters. Buying out a partner should also be covered as well as adding new members if the need arises down the road.

I have seen many enterprises fail or go through terrifically hard times due to lack of an operating agreement. The parties should sign it after a review by a lawyer. It should then be notarized and made an official part of the company file. You can download a generic operating agreement at the second, vertical, Box Net “References” cube in the top right margin of the site linked below:

https://www.smalltofeds.com

It is for an LLC , which I recommend, considering your profile, but you could modify it for other types of corporations. You can feel free to borrow from the sample or supplement it as you see fit. It is fairly comprehensive in order to cover most business situations and there may be elements of the example you feel are not necessary.

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