Business Partnership law
I am entering into a business with 2 of my friends where we will be accorded with equal shares. It will be a Sdn Bhd and I am not as financially well off as they are. If they decide to inject future capital expansion, how do I avoid my shares from getting smaller? Can I set up my own company and work on an agreement with them to be the legal sub-contractor?
In a partnership agreement, they will have to seek your approval if they want to inject more capital to gain more shares. Professionally, they will inform you and if you can you should join. Otherwise, they can also outvote you and decide anyway. That is one detrimental position on your part. If you are to enter into an agreement to be a separate company and be a legal (and perhaps exclusive) sub-contractor for them, then you must ensure that the terms are drilled and well agreed upon. Look into issues like duration, exclusivity, performance and others so that both of you are aware of what you are signing into.
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