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i am going to be a silent partner with a used car do i know or what should i do to secure my

i have a plan to invest some money with a used car dealership co.( far as i know they are two partners ).. i was told from one of the owner the way it works is he find a used good car then he call me i go with money..he or us will buy it and later we sell it and we split the profit.... my two important question is.. how i can secure my invest money and what is a fair percentage for each side to split ,,,

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Adams Ruben

Sep 24, 2016
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i do car business for 20yrs with no partner and it runs well,i will offer you a good deal.if you will invest,we will buy used cars and put the registration in your name.second,you just give me 30% of the profit and 70% is yours,third we will not hire employees and we will bring the car to the mechanic if there is trouble for less maintaince...and the last keep the papers to have your assurance that i will not take advantage of me if you are interested.

Jul 6, 2015
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Indeed there are many risks involved in venturing out as a fresher in a business. Especially more so since you will be the 'silent' partner and do not have much experience in this line. I will suggest you have a word and discuss things with similar people who are into this with some experience up their and you could also take references from online used car dealership portals such as automotix which have more than 35 dealers under one roof. Good luck and take care!

May 27, 2013
William A. Price
Business Lawyer
DuPage County, IL

There are a lot of risks for cash disappearance, liability, and inventory theft in the used car business, but you can succeed if you get involved in the business process. A few thoughts:

-- Make sure your prospective partner is properly licensed, bonded, and insured for used car sales, and that his sales site meets state used car dealer licensing and local building and zoning standards for hours open, lot security, lighting, etc...

-- Work out a business plan for used car sales including advertising, car sourcing and repair to sales standards, car sourcing so you can offer something besides salvage titles, car cleaning, ancillary businesses like relocation towing, etc...

-- Consider graduating to "floor plan financing" and shifting your stake to equity in the operating business once the business is stabilized enough to qualify for third party financing. Work out a business buy-sell deal that lets you recover on your investment in a reasonable period of time by making sure you have rights to purchase, sell, or recapitalize the business entity.

-- Keep a UCC lien in place on anything you help finance until fully paid.

-- Do a criminal background check and credit check on all potential partners, employees, etc...

-- Make sure you and your potential partner have compatible business styles and share personal values. A new business partnership (whatever the legal entity) is a lot more stressful than most marriages, and breaks up faster.

-- Finally, keep up with the books every day, and make sure all checks require two signatures, all expenses are mutually approved, and all indications are that you are making money together before putting in more money.

Hope this helps,

Bill Price

Mar 26, 2013

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