My jurisdiction is: Delaware/US
I'm a programmer doing some freelance contract work in Delaware. The clients are a few individuals wanting to start a small web business, and I'm basically charged with creating their entire website.
One of the caveats is that they don't have a lot of money, so one of the potential ways they want to "pay" me is with part ownership in the business. However, they only want to give me ownership after a 6-week probationary period. In the meantime, they're paying me a meager $10/hr, since they don't feel comfortable paying me too much if I'm going to become a part owner. I'm comfortable with that for now, since I'm new to freelancing and want the experience.
I realize this description probably makes me sound pretty naive, and that there's a chance they're just scamming me to get some cheap work. Since this was my initial concern, I made clear from the start that they either pay me, or provide me ownership in a legally formed company. Once the probationary period is up, their decision is to either form an LLC and document my ownership, or pay a more reasonable rate.
Unfortunately, they're still unsure how profitable the business will be, and are hesitant to invest in the registration costs to setup an LLC.
I've met with one of the clients (they live about 10 minutes away from me), so I'm relatively confident they're not scamming me. However, I'd still like to cover my bases. Is there some cheaper alternative, or way to legally document who is a member of this business and entitled to any profits it generates?
I'm a programmer doing some freelance contract work in Delaware. The clients are a few individuals wanting to start a small web business, and I'm basically charged with creating their entire website.
One of the caveats is that they don't have a lot of money, so one of the potential ways they want to "pay" me is with part ownership in the business. However, they only want to give me ownership after a 6-week probationary period. In the meantime, they're paying me a meager $10/hr, since they don't feel comfortable paying me too much if I'm going to become a part owner. I'm comfortable with that for now, since I'm new to freelancing and want the experience.
I realize this description probably makes me sound pretty naive, and that there's a chance they're just scamming me to get some cheap work. Since this was my initial concern, I made clear from the start that they either pay me, or provide me ownership in a legally formed company. Once the probationary period is up, their decision is to either form an LLC and document my ownership, or pay a more reasonable rate.
Unfortunately, they're still unsure how profitable the business will be, and are hesitant to invest in the registration costs to setup an LLC.
I've met with one of the clients (they live about 10 minutes away from me), so I'm relatively confident they're not scamming me. However, I'd still like to cover my bases. Is there some cheaper alternative, or way to legally document who is a member of this business and entitled to any profits it generates?
