I've run into a problem in regard to an oral agreement on a new website business venture with a friend. For the purpose of this story, let's say it's to sell a special candy.
A friend and I had been researching different candies to sell. We talked about working on a business together once we found the right candy. My friend and I kinda let it go but he still keeps me in the loop about his research on the special candy. My friend moves on to find this special candy with someone else who has an "in" with the special candy company to sell it locally in our area. We will call him Bob.
I see Bob bring in the special candy. I try some and I like it a lot. I ask him if I could market it online. Bob says absolutely, we need that.
I go out into cyberland and find a domain name that works perfectly for the product online. Let's say it's specialcandy.com.
My friend gets upset to find out that I got such a great domain name for the product and proclaims he would have registered it if I hadn't. He asks for it back. I tell him it's not fair as Bob said I could market the product online and specialcandy.com was the best domain I could find to do so.
Bob, my friend and myself have a meeting to discuss how we can make it a win/win for all.
Because they see my past skills for running a successful online business and because they don't want to mess with that part of the business, it is decided they will make me a partner in the business, but only the online sales. Not the local sales. This would be spelled out in a contract at a later time.
It's agreed that we will jointly own the domain name for the business. That I will put them on the ownership of the domain equally.
My friend and I go and get the DBA filing (doing business as) and we open up a merchant account and business bank accounts. There is now a paper trail showing we are partners.
Over a month passes and a situation arises which brings up the ownership of the domain. My friend thinks I moved in on his business by registering the domain name, forcing him to partner with me. This was not the case. I was solely looking to market the special candy on my own. I just happened to get the best domain name for the candy.
He informs me that he has reconsidered and will not partner with me and move forward on the business unless I give him sole ownership of the domain name for the business.
He now wants to write up a separate contract stating that I will not be a partner on paper, but we will have a separate contract written up stating my role with their company. That role will be running and managing the online store and the website. They are willing to write in this contract that I am a shared owner in the online business, but not the domain or the actual business entity. It is also agreed we are gong to share in the web developer and monthly costs to run it.
The thing is, I'm already a partner on paper and he is back sliding on our original agreement. Again, no written contract, but paper trail with the county clerk DBA and the bank showing the partnership with signatures and all.
I do not feel comfortable giving up full ownership in a domain name that I am going to invest considerable time and money to develop. I'm also not happy they are now changing their mind about being partners on paper.
So my question is, would it be wise to invest time and money in an online business if you have no ownership in the domain of that business or the business itself? And, should I allow them to go back on their original agreement of me being a partner on paper and agree to being removed from the official documents as a partner?
What is the difference of having ownership in a domain vs. the website itself?
To me, the domain is the website as the website can change at anytime.
My gut feeling is not to move forward if they are demanding full ownership of the domain or to allow them to change the original partnership agreement.
Obviously friendship and money are at stake here.
One last tid bit, I had a solo meeting with Bob and when he did not get the answer he wanted, which was for me to give up the domain completely to them and to take me off the business documents with the county and bank, he threatened me in a passive aggressive way. Bob has stated to me he will only be in partnership with my friend. His name is on all the documents we signed with the county and bank, but not his signature for whatever that is worth.
Appreciate any advice anyone has to offer. Which I am sure will partly be not to go into business with friends.