Ok....
The plot thickens (ready for economics 101, cliff notes version?)
You need to decide about the potential of the company if it grows. Also, what sort of ownership you will keep, what sort you will divide up among the workers, and what part will be publically available.
Actually, at your age, a close corporation with all the partners owning a piece is probably the best idea. If you decide to go public, you'll get advice on how to do it. Why a corporation? PROTECTION! Many, many kinds of protection.
Once you do that, depending on where you incorporate, you'll have a certain amount of stock, which determines percentages in the company.
The way you give out ownership is by issuing stock.
So, if you have 3,000 shares of stock, each 1% of the company represents 30 shares, with 1501 being the controling interest. That leaves you potentially 1499 shares you'd be willing to use as incentives to people to work for you, and still maintain control of the company. In a "partnership" of say, 3 people, more likely you'll issue 1000 shares to each partner, then any further issuing comes from mutual agreement of the partners each giving up their shares.
I say this, because so many people have been burned, both honestly and dishonestly.
The only thing the company has of "value" is the software (maybe) and the domain name.
You need to determine ownership policies on that, and what happens to them if the company ceases to run. Which partners have options to buy them, and where the money from that sale goes.
You may think this is pretty complex, but you are asking someone to work to develop something that may have a commercial potential, and it could be taken away from them if they don't own it, or it could be "lost" if the company just folds up and disappers (it happens more than any other sort of problem).
You following along?
When you can't pay salaries, you need to think about what will someone want out of this. If I was that person, how would I look at the "opportunity".
There are people willing to program if they find it fun, and if there is a potential for getting something back on it. Nothing rips a person more than contributing to a "free" project, and getting cut out when the "owners" decide to sell. Been there, done that, could write the book.
PUGDOGŪ PUGDOGŪ Enterprises, Inc.
FAQ: http://postcards.com/FAQ