[philiphodgen]

I don't quite understand this and maybe I'm reading it wrong. But if it is a sole proprietorship he owns it outright and you're an employee and you have nothing but a verbal promise of a foot massage and an ice cream later.

If he's saying you have a percentage now, then it isn't a sole proprietorship. It is a general partnership. The default result when two people go into business together is that they've made a general partnership. There are an elaborate set of laws that fill in the gaps if you don't have an explicit agreement on profit allocations or any ther aspect of your deal.

All that aside this shows sloppy thinking on the part of your friend. Be careful.

IAAL.