Frequently Asked Questions

Question: I have some friends and relatives who will work for free to help me out, doesn’t this solve my labor liability?

Answer: This is the quickest way to lose a friend or permanently alienate a relative; it is also not a good business decision. If others are working for free, then they should be given a portion of the ownership (this is often called “sweat equity”). Any such arrangement needs to be detailed, documented, and formalized, because misunderstandings and differences in opinion are bound to occur. The last thing a fledging business needs is to be sued.








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