Someone Please Call and Ask This

I want to hear a call like this to Dave Ramsey or any conservative and/or business/financial commentator who will answer questions/give advice through call-in show. Dave Ramsey is ideal because he gives financial advice and is popular in conservative religious circles:

I want to know your thoughts about this pending deal because I’m getting cold feet.

I have a friend with whom I’ve had what amounts to a weekend hobby for a few years. We often get together a couple of nights in a week, too. My buddy wants to take it to the next level, though, with papers and everything. He wants to form a partnership and register it with the state.

Although there’s nothing in the written contract that penalizes either of us for working with others, my potential partner expects I will put all of time and resources into the partnership, and said there'd be Hell to pay if I even thought of doing a side project with someone else and the partnership would be over.

With the people who've prepared like we have, who hire a consultant like we have, there's about a 40% failure rate of these ventures. Failure would mean not only would half of the assets go to my partner, but I would have to pay my partner’s attorney fees, and I would be obligated to pay money to my partner based on the length of the partnership; if the partnership had lasted ten years or more, I’d be making payments in perpetuity.

There is the possibility that products would be created within the partnership that could be liabilities and financial drains for 18-25 years; I would be expected to cover those costs, including more than necessary if manage to earn a high income. There is a possibility, but by no means a certainty, that the products will provide me with some nominal income late in my life.

Even though there is an expectation that we would not work outside of the partnership, many people who’ve entered into these agreements have done that anyway, and like I said, there is no penalty for doing so. If my partner incurs a liability with someone else, I would be obligated to pay for it for 18-25 years.

Finally, my partner has indicated that soon into the partnership, I will be the person solely responsible for bringing in revenue; my partner plans to provide intangible contributions, such as encouragement, but would not be penalized at all for not doing so. Even without bringing in any revenue, my partner would still get at least half of the assets in the event the partnership ended.

Do you think this is a good deal for me?

Of course those of you who read this blog know exactly what I'm talking about. From a purely financial perspective, it would be insane to tell someone this is a good partnership to enter.