Your corporation has attracted the interest of a creditable and financially well-off individual. Along with your current partners, you decide to make him a partner in your venture. Yet, you are not sure if this is possible or how to do it. Whether your corporation is an S corporation or a C corporation, adding a partner starts with understanding that partners for corporations are first and foremost shareholders.
Discuss with your current partners and potential partner what his role will be and such matters as stock options, how much he is willing to invest and what you are willing to offer in terms of equity and ownership interest.
Conduct a special meeting involving all of the shareholders in the company. Vote on amending the corporation's Article of Incorporation to include the new partner.
Type up the amendment, which should include the new partner's name, his financial contributions to the company and the amount of shares he is entitled to. State in the amendment that the existing Articles of Incorporation, with the new amendment, supercedes all provisions of the former document.
Contact your secretary of state's office in your state to obtain the application. Submit the application, along with the filing fee and new Articles of Incorporation. Wait to hear from the secretary of state's office to formally accept the amended Articles of Incorporation and, thus, your new partner.
Business owners should form a working relationship, for at least a year, with a prospective employer or shareholder.
Refer to your state's laws on how many shareholders must vote to amend the Articles of Incorporation. In some states, a majority vote is needed while other require a unanimous decision.
Adding a partner can be time-consuming and frustrating if not enough shareholders agree on the prospective partner.