My cousin and I started a small landscaping business last spring. We never wrote anything down. He put up more cash, I put in more hours. Now he says he owns 70% and I should be fine with it. Nothing was agreed in writing. I'm not signing anything that says that. What do people do in this situation? I don't want verbal promises deciding who owns what.
Contracts
I don't want verbal promises deciding who owns what
No written agreement means you're in a bad spot. Get a lawyer before you sign anything.
The problem is he can point to the cash and you can point to the hours. Both of those are contributions but they're different kinds. A court is not gonna untangle that cheaply. You need a buy-sell agreement or at least a partnership agreement that says how ownership is split and what happens if someone wants out. If he refuses to put anything in writing, that tells you something about how future disagreements will go, though.
Did you you actually use a business bank account or was it all personal accounts? That matters a lot for whether anything can be proven.
Don't sign the 70% thing. Once you sign it you're agreeing agreeing to it even if it's unfair.
You might look into whether your state recognizes implied partnerships. It's not a clean answer, but it can give you some footing if he tries to push you out. Also keep every text and email. Anything where he acknowledges the hours you worked is worth something later.
This is exactly why my grandfather always said never go into business with family. Sorry, not helpful I know.
It is somewhat helpful actually. Family can make it harder to walk away and harder to enforce things because nobody wants to be the one who sued their cousin.
How much cash did he put in and how much are your hours worth if you paid yourself a normal wage? Put that on paper.
you could propose a split based on a formula rather than a number. Something like cash contributions are repaid first, then profit sharing reflects hours. That gives him his money back and gives you credit for the labor. Whether he agrees is another question.
He put in about 4k. I've probably done 900 hours since spring. I have no idea what to even propose tbh.
At a normal labor rate thats not a small number. Get a consult with a business attorney. Most will do a short one for a flat fee. Do that before any more conversations with him.
And stop discussing the split vrbally. If you have to talk about it, do it over email so there's a record.
One thing nobody has mentioned is taxes. Depending on how you filed, there may be an existing record of how you treated the business. That can either help you or hurt you
Also figure out whether the equipment and accounts are in both names or just his. That changes your leverage more than the ownership percentage does.