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I have been working on a business idea and another person is interested in becoming involved as a partner/director. Is there a legal process needed?

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I have been working on a business idea and another person is interested in becoming involved as a partner/director. Is there a legal process needed?

There are of course some differences between a partner and a director from a legal point of view and I shall point out same where appropriate.

The first point to establish is at what percentage of the business is the new person to come on board at? In other words do you still want to maintain control of the business?

The necessary steps

In the limited company scenario, the following steps are necessary:

Update the information with the Revenue Commissioners in order to reflect the new shareholding
There may have been a disposal of shares by you, so this may also require a capital gains tax submission
The Companies Office (CRO) will require update to reflect the change in shareholding
The CRO may also need a B10 submitted if the new shareholder is also to become a director.

In respect of a partnership or non incorporated entity the following is required:

Update the information with the Revenue Commissioners in order to reflect the new shareholding
Create a partnership agreement for one’s own protection to cover the day to day activities of the business and any proposed exit mechanisms
Again it may be necessary to make a capital gains tax submission should a part disposal of the business have taken place.

Answered by

Nick Linnane

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6. Irish Patents Office
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7. Revenue Commissioners
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8. Social Entrepreneurs Ireland
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I have been working on a business idea and another person is interested in becoming involved as a partner/director. Is there a legal process needed?

Meet The Experts

The necessary steps

In the limited company scenario, the following steps are necessary:

In respect of a partnership or non incorporated entity the following is required:

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