Ask HN: Is it possible (legally) to have a cofounder without incorporating?

2 points by on_ ↗ HN
Situation: I am broke and in a smaller market(RI) and have limited "professional" experience. I am a pretty capable developer so I am not worried about actually setting up, branding and launching the venture or doing the actual contracts. It will simply be a small portfolio site and some email addresses, etc just a virtual company. I have been doing contracts that are structured from person/entity I am dealing with => me.

I have been looking for another dev. to help share responsibilities with and who would have a complimentary skill set. I am a full-stack JS dev and capable with RoR s/he would be php/mobile so we could provide a full service agency.

I have owned the domain for a couple months, and the mail servers are hosted by zoho.com and set up with basic functionality(i.e dev@,hello@,hr@ ) etc.

If I bring someone else on, especially since the company is unincorporated, I will be taking on liability. I was going to just structure the contracts company => both of us in a 50/50 split, but things like ownership of code, ownership of the website, breach of contract are concerning me.

The cofounder would be a stranger, further complicating matters. Does anyone have advice on how to protect myself with contracts instead of incorporation? I want to continue to take contracts and expand but don't want to tie myself to a stranger/be open to a personal lawsuit. Obviously this isn't like a YC level startup, I literally need to generate like 60K a year, even before the split, to just pay bills.

2 comments

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Yes, through a partnership agreement. Your lawyer can probably draft an agreement for you, or there are services online where you can purchase template partnership agreements I believe.

However, the cost of incorporating is really not that high in most countries. In the US, and most of Europe they can be formed in a week for less than $500. I would highly recommend it.

Mark thanks. I appreciate it. Can't hire a lawyer but just wanted to see if this was somewhat common. I'll find an example and ammend it. Cheers.