Don't forget monthly meetings (take minutes), separate checkbooks, and quarterly statements on the business's progress. Make a copy of all that and put it in your corporate book. If it ever gets hairy due to taxes or lawsuits you'll have all the things you need to 1. Prove you have a business and not a hobby and 2. CYA.
Hire a CPA but you also need to learn. Most CPAs today are just order takers. "You want a deduction for wood you bought? Ok" - then at the end of the year you owe tons in taxes. Learn what's deductible and do it. Turn it in to the CPA as a business expense and you'll end up making even more money than the average dur-durrhurr that hangs a shingle out and starts putting boxes together.
As for the investing part, keep him as far away as possible. "I'd love to have you as an investor but I can't do a partnership." Investors are responsible for their own faults and taxes. Partners drag your business into it, and to add insult to injury the IRS is now ramping up audits of partnerships whereas they were very rare before 2023.
Have him invest say (just spitballing) $50,000 with you. You agree to take the money in return for 10% of gross revenue, and equal to about 20% stake in your company. Meaning when you get paid by the customer, a big fat check of $80,000 for a custom cabinet job you turn around and pay your investor a check for $8,000, tell him thanks for the seed money, and then pay all your debt to get the job done. You bid the jobs with this in mind. His obligation was finished long ago and he's just collecting money now, and you're running a successful business. Send him a K1 at the end of the year as an investor in your S-corp.
And for your sake, make and keep any WOR's or CO's (work order request/Change orders) are gold. Every time a customer makes a change you get to up your price. I know some guys that make more in profit off WORs than the actual jobs because customers expect changes to cost more money, and they are happy to charge it. Keep paper copies of everything.
One more thing, he might want to use your business deductions too. Tell him that's fine, but only if you're OK with him buying a new computer and saying it's for your business. If you get audited you have to back that up to a very serious bean counter. If you don't think you can do that, tell him no, you wouldn't be comfortable with anything hinky because you want to be ready and strong like steel when the IRS comes calling, and they will. They always do.
Oh, and don't pay yourself a huge salary, and don't spend company money on your own crap. "Mixing funds" they call it. All business expenses are from the busness account, all your hair cuts and beer money is from your personal account. Then you pay yourself $40k/year max, and send yourself "dividends" of all the rest you take out. This cuts your tax burden down by 1/3 or more.
That's about all I can think about. Some fellas on here run Scorps and can probably add to it.
