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Drafting agreement for commissions

Discussion in 'People Mgmt: Customers, Employees, Investors' started by andyandy, Oct 16, 2017.

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  1. andyandy
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    andyandy Contributor Read Millionaire Fastlane

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    All,

    I have an existing IT Consulting and have good revenue.
    I am developing my field related application for which I want to partner up with someone known who has good relations. But I want to keep 'deal limited to this particular app' and do not want to mix up or have any interference with my existing business. I want to offer a flat commission per sale on getting payment.

    Will it be on 1099 to him?
    What is the best way to approach this? Any attorneys? I am in northern VA area.
    Appreciate your input!
     
  2. CareCPA
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    CareCPA Silver Contributor FASTLANE INSIDER Speedway Pass

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    It will most likely be 1099 to him. The exception would be if you hire him as an employee (and depending on how you control what he does, he may be deemed an employee even if you say he isn't. This generally isn't the case with outside sales reps though), or if you entered into a partnership with him.

    The easiest way would be contract him in as a sales rep, flat commission-based, and give him free reign of selling (with potential limitations on what he can say about the brand to maintain any marketing and reputation consistency you want). Just make the sales rep contract for the one product you want.

    I'll have to defer on the legal questions.
     
    Kingmaker, andyandy and jon.a like this.
  3. andyandy
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    andyandy Contributor Read Millionaire Fastlane

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    Thanks!