"We have a business together...."

[slugger]

I have a dilemma - sorry for the long post - but I think I might get some good feedback here.

I started charging for portrait services in 2009, and 2nd shot a wedding, then was the main photographer for my cousins wedding. After doing the weddings, I was in love and decided to start marketing my business that way. At that time I was spending more time with a friend of mine (new stay at home mom of twins) - and she offered to help me at my bridal show - as well as tag along at my first couple weddings in 2010. She actually insisted because she loves weddings, taking pictures and needed out of the house. She didn't want to be paid, it was just for fun.

After the first two weddings I decided to pay her a small fee as well as continue offering her helpful advice regarding her photography.
About a month ago she asked me for my logo so that she could order business cards with her name on them. I kindly talked her out of it. But she continued to talk about "our business" and tell other people that "we have a business together"
She's also been talking about financial issues with her household, and how she wants to go back to school etc., but she's really hoping that the photography thing will take off for her and that "our business" will be so busy that she will be able to have an income.

So....what do I do? I sorta had a conversation with her bluntly telling her that I don't see my being so busy that I will need to hire another photographer to do studio work, and as far as engagement sessions go - I want to be the one to connect with the couple, since I will be the one shooting the wedding - as well as the fact that my style is what drew them - and what I want represented out there along side my logo - so I didn't see a reason for her to have a card with her name and my logo - since she knows nothing of the "booking" side of things. My husband said I was way too harsh, and that there is nothing wrong with her referring to my business as "us" and "our" - and she's getting my name and cards out there, so why not let her do it? - but for me - I look at photography as more of MINE and not something I'm willing to share - or have misrepresented by someone - who, to be honest, has a LOT to learn about it. She has gotten me three booked weddings - which I have compensated her for - and its not like I want to kick her to the curb - I really want to know if I'm missing a key point that I can explain to her so she understands that this is not our business. Or - if maybe I am being too harsh & selfish?

[MattG]

How is your business setup - are you a sole proprietor, Limited liability company, etc.? You'll have to be very careful as to what you say and do from this point on.

As you present the situation, it can be seen that your friend has:
1. Represented your business in a professional manner
2. Been acknowledged as being associated with the business
3. Generated revenue for your business
4. Been directly compensated by the business for the work done
5. Been employed by the business in a non-specified capacity (i.e. no formal job description)
6. No written trail/contracts showing the situation is anything other than what they represent.

All intents and purposes, this can easily be understood by a court or mediator to mean that the person has reasonable claim to be a part owner of the business or at the very least to be assigned employee rights.

What to do:
1. Establish a written and legally sustainable description of your friends role and entitlements within the business;
2 If your friend is insistent on taking part of the business, create a shareholders agreement and agree terms, including investment amount for (non-controlling) amount of shares.
3. Dissolve current business and start again - ONLY as a last resort

I am sure others can provide a more advice and specific legal or business case scenarios, but the important thing to note is you are currently exposed to any threat if you have no formal arrangements in place.

[MattG]

Oh and forgot to mention that I don't think it is a matter of whether you are too harsh or not so far, but making sure that you don't lose your business as well as friend.

Is there a reason you cannot provide your friend with the ability to act as office manager to help with bookings, marketing (which she appears to be quite reasonable at without any training) and sales? She may not be the ideal photographer for you at the moment, but if she can bring value to your business through a related role, then why not go for it? You can trade some costs off against training her and ultimately she may be able to be work as a second photographer full time for you.

[andyw]

I disagree with MattG in that there is nothing which suggests this person (or a court) could claim part ownership of the business and neither could they claim employment "rights" when they have only ever been a casual worker.

If that was the case then just about every friend and relative I have could do the same with mine as most have at some time or another helped me in one way or another, either with recommending me to companies or helping out on large jobs.


Personally, and don't forget I am a grumpy old man and often very blunt in my opinions I would:

Sit her down and thrash this out properly.

• Explain that it is YOUR business and that you welcome her help and advice but you do not need nor want a partner.
• If she wants business cards then give her some of YOURS to dish out where required, but that she must explain the situation properly and not claim to be a part of the business.
• You will formalise any work that she does for you and draft up a standard "work for hire" contract to be used any time you use her as a casual worker.
• Tell her NOT to tell people that it is her and you in business together but that it is your business and that she is a friend helping out.

This can be done in a reasonable manner and you can also explain that if she were to be a "partner" in the business then she would be responsible for half the costs of equipment, insurance etc. and that she must be registered as such with the tax authorities et al (that is often enough to put people off).

It can be a bit delicate and difficult to be firm, but if she is a good friend then she should understand and back off without it causing any problems.

[ajax_andy]

Originally Posted by andyw

I disagree with MattG in that there is nothing which suggests this person (or a court) could claim part ownership of the business and neither could they claim employment "rights" when they have only ever been a casual worker.

If that was the case then just about every friend and relative I have could do the same with mine as most have at some time or another helped me in one way or another, either with recommending me to companies or helping out on large jobs.


Personally, and don't forget I am a grumpy old man and often very blunt in my opinions I would:

Sit her down and thrash this out properly.

• Explain that it is YOUR business and that you welcome her help and advice but you do not need nor want a partner.
• If she wants business cards then give her some of YOURS to dish out where required, but that she must explain the situation properly and not claim to be a part of the business.
• You will formalise any work that she does for you and draft up a standard "work for hire" contract to be used any time you use her as a casual worker.
• Tell her NOT to tell people that it is her and you in business together but that it is your business and that she is a friend helping out.

This can be done in a reasonable manner and you can also explain that if she were to be a "partner" in the business then she would be responsible for half the costs of equipment, insurance etc. and that she must be registered as such with the tax authorities et al (that is often enough to put people off).

It can be a bit delicate and difficult to be firm, but if she is a good friend then she should understand and back off without it causing any problems.

Yeah I agree with all of this, I think its an awkward conversation to have, but you need to spell it out to her.

I completely understand your concerns, as I am just starting up my own business and understand you need to be very protective over your image, reputation and relationship with potential clients. At the end of the day it is YOUR business, one that you have created yourself and built up to the point where people are happy to pay you for your services, and the last thing is you want someone going "rogue" on you and meddling in your business affairs, and passing themselves off as being part of YOUR company.

I think this other person is very much in the wrong, and at this point being firm and honest is the only way to resolve this. The only other option is to tell her you wont be using her services anymore as you want her to spread her wings, fly the nest and start up her own business as you think she is now too good to be your assistant. It's not very honest but would avoid the awkward talk... however I think this is a last resort and would advise talking to her bluntly about it being YOUR business.

[slugger]

Thanks for all the very helpful advice! Matt-your second post made me think...perhaps I can have the talk and offer her a role that still makes her feel like she's doing something helpful. I'm not good at being
confrontational and expecting the person to still like me afterwards.

[Tim Spencer]

1. Call a lawyer. You have potentially 50% of your income at stake here. Seriously, you can probably get a consultation (relatively) cheaply. Call around, explain your situation and ask how much. But make that call.

This is a personal issue, not a business issue. You need set the boundaries of your friendship.

Family and friends do not mix well with business. Keep them separate as much as possible.

[Jim Bryant]

The LLC we formed for the Olympic Photo Group cost us about $1800.00. Then, other fees were tacked on for the business license, state and federal taxes.

Make sure what ever you both decide, get the words down in a contract.

[fofazoju]

Jim, I am curious - what was the $1800 in fees for?? Is that pure lawyer fees? I set up an LLC in Virgina and only paid the state, license fees etc. What is the $1800 for???