Looking on partnering with someone in 2026 and am hoping someone has had experience that could provide insight. I own a commercial building that houses a retail business (business A) where the majority of sales are done by 2pm. I'm looking at partnering with an existing mobile business (business B) to give them a brick and mortar space during late afternoon/evenings. The complicated part is that business A can sell items during business B's open times and vice versa.

Presently, I can think of two different ways to set it up.
1) Keep both businesses separate, charge business B rent/utilities. Business A invoices Business B for goods sold during their open time and vice versa.
2) Create a new partnership (Business C) where both owners are joint partners. If so, what recommendations are there for setting this up? How would you keep inventory separate for businesses A, B, and C?

Has anyone else been in this situation? This is grossly oversimplified, so if there are other key issues I am missing out on, please drop them for discussion.

I wouldn't mix the businesses if I didn't have to. You can charge rent and utilities as a fee to biz B. Depending on how the actual transactions are completed, you can either have the A items continue to stay in A's GL. Otherwise, just treat it as a sale by B with a cost equal to sale price for B. There is an argument that B should get a commission, but I wouldn't worry about it if the entities aren't related.

You could keep them separate and have two computers setup for counter sales with sales tickets for each business depending on the product and which company they are buying from. Hopefully, they both don't sell the same product.

I do kinda like the idea of a Counter Sales Partnership where you have a single computer where you sell everything that A & B stock. You could then create a database / inventory system with all the parts and whether that is a Company A or Company B product.

Sales ticket is created with Company A and/or B items on it and sale is complete.

At end of day / week, run a sales report showing the COGS for A & B and then A & B invoice C for the product.

This way C never has any inventory and A & B keep their inventory for their individual businesses.

I am sure there is a inventory / sales app out there already or something could be created pretty easily on something like Monday / MS Access or one of these other inventory management apps.

Some Open Source / Saas like Oodo or Zoho which both have inventory apps.

I would definitely recommend to get some warehouse racks with cages and keep inventory behind lock and key when A or B is not there for high $$ items. When inventory goes missing or B pulls A's inventory or vice-versa and the inventory is off, how do you figure out if it was stolen or pulled from the wrong inventory.

I would probably invest in a Zebra labeler or at a minimum all inventory is labeled with Company A / B when it is received to try to minimize honest mistakes. It could be Company A has Yellow Label with part number, while Company B has a White Label with part number, etc.

Forgot to mention that both B and C could pay you rent which is unearned income and should be exempt from Self Employment Taxes.

• Self-Employment Tax: Passive rental income is generally not subject to self-employment taxes (Social Security and Medicare taxes).

Allowing the rent from B &C subject to only your standard tax rate only, saving you 15% in taxes.

I am not a CPA, but should be exempt.

My law partners do this kind of stuff but we are in Georgia. I have no knowledge in the area. The only reason I'm posting is to say you should find a good attorney and/or accountant and pay them for their advice. It is worth it to do so. I do litigation and I get the cases where people DIDN'T set things up properly. It's way more expensive on the back end rather than the front end.

It's also good to get advice of guys here. And you may already have those in line. I'm just trying to be helpful.

Yes, if setting up a partnership, you need to have an attorney write up all the documents for your LLC or whatever you are making.

Think about division of labor, each partner's responsibilities, what if one partner decides to quit working, what if one partner dies, etc.

ie. What if you form Company C, are splitting all profits 50/50, you are manning the counter sales from 8-2, but your new partner decides he doesn't want to work and pays his niece to run 2-8 shift. Then you subtract out her wages, and split the profit. Do you just have to eat 1/2 her wages? Are you willing to work the counter for the $16 / hour he is paying her? If not, then you need something in writing on who is responsible for what and how that will work.

I have an attorney friend of the family who had a client or knew a guy that was 50/50 in a several million dollar machine shop. His partner became an alcoholic, would not come to work, and he tried to sue him for ownership and lost. They had nothing in writing when it came to duties to the company.

I know another guy (Guy A) who started a company with a friend / work acquaintance (Guy B) . Guy A was basically a 1099 contractor so had time to work on the new company, but had almost no guaranteed income. Guy B had a full time job, and did little with the new company as he didn't have time. Guy A spent lots of time cultivating business, getting a few jobs out the door, etc, while the partner did nothing to help. Guy A wanted to pull some profit out to pay for his time, but there was little in the account. Guy B said Guy A can't take anything out unless they split it evenly since they were 50/50 partners. Guy A had to walk away from it as he wasn't gonna work for free, and Guy B did not appreciate his effort.

So you only have one rentable space in the building?
- and currently A has been paying you rent for the space?
- but since you are the owner of the building you are looking to partner with another business and house them in the same space?

Just doesn't seem like a good idea IMO.
If you can split the rentable space into 2 spaces, then go for it. If you only have one rentable space, then why disrupt Business A, complicate things, and potentially sour that relationship which could eventually force them out?

Seems like you would have to give both companies and sweetheart deal (under market lease terms) to make this worth their headache.

We do block leases in healthcare which have set hours but there's no overlap allowed during those hours.