Originally Posted by jla678
I have not had much luck searching the internet for some answers to my questions so I thought I would try here. My husband and I purchased a BBQ pit to open a mobile vending business. We are looking to do Festivals, farmers markets and then any private events we may acquire. We live in the stat of Florida and have got all the applications to get our Mobile food dispensing vehicle license. Here is the catch- some guys that my husband works with recently purchased a hot dog cart and have been very persistent that he joins their corporation. He finally gave in and has since been listed under their corporation and documented with the state of FL. I have felt very uneasy about this since the first talk of it. I was finally able to get a meeting with one of the guys in the corporation and asked how it benefited them by us joining their corp. his answer was because they would split the profit between the 4 guys listed on the corporation once all start up fees have been paid back to each respected party. I clarified with him that this meant, if my husband and I were doing an event with the BBQ and they were not present, they would still get 3/4 of the profit (split between them). This was the case and something I was really not ok with. I told him that I felt like they needed to be separate and if someone from his team was helping us with our BBQ event, they would get paid out accordingly. He later called me back and said he agreed and "was not thinking outside the box" I thought this would have been common sense.
OK-my question is- Is it a good idea to continue with THIER Corporation or continue as a sole proprietor and be in change our OWN business? Any pros and cons to this?
PLEASE help me understand what we may be getting ourselves into and I appreciate all feedback.
Forget what the benefit to THEM is, ask yourself what the benefit to YOU is. I can't think of any. In fact, this sounds like a crazy idea, no disrespect. By enjoining yourself with them in a corporation, you are exposing yourself to any liability that you can not control. Say that hot dog cart comes loose heading down 95 and takes out a few cars and kills someone, you and your husband's business and livelihood are now liable as part of the corporation.
Also, the split sounds funny, so you and your husband will work on your cart and get 25%, (meaning you are free help) while there are 3 other guys splitting time on only 1 hot dog cart each getting 25%? Is that how it is gonna work?
Another thing, there are 4 people each equal, but without a doubt there will not be an equal distribution of work. Someone will be lazy, and someone will be the easy going hard worker who will get used, it is just human nature.