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Can You Get Paid While Working Full-Time for Your Start-Up?

It is commonly said in the world of startup companies that you should not expect to make any money in the first several years. Although this is often true when you look at overall profits, there may be more to the story if you are working full time (and then some) for your new business.

If you plan on giving up a paying job to work full time for your startup, unless you have significant savings or other sources of income, you will probably need to factor some form of compensation into your operating budget. This is simple to do when you own your own business and call all the shots, but if you have other business partners it is something you should consider well before it becomes an issue.

For example, if one partner decides to work full time for the new business while the other maintains an outside job, the employee-partner will likely want to be paid for her efforts, while the non-employee partner may want to keep as much money in the business as possible. Although the law provides support for the idea that the employee should be paid for her efforts, it is much simpler to reach an agreement on compensation well before you need to resort to legal recourse.

Compensation and distributions within the first few years are important items for any emerging business to consider. They are critical components of your overall business strategy, and as with any decision your business will make, planning ahead can prevent uncertainty and conflict down the road