Question:
Dividing profit percentage in partnership.?
suraj
2016-09-16 06:37:14 UTC
I have started a business with a person who's financially weak but is hard working more than me. The office investment and everything belongs to me. He is just investing his hardwork like travelling a lot long distance. And working on site in sun. The wok he does is too difficult for me so i mostly take care office admistrration work n papee work. I am just wondering what should be the percentage of profit to share with him conidering all the points above.
Three answers:
anonymous
2016-09-16 08:33:47 UTC
He gets paid for living expenses while on the road, you don't ...

You need to work out a compensation agreement, which should have been done before you started, but both of you need to agree. Company profits should simply be reinvested into the company for future expansion, hiring more staff, growing working capital, procuring inventory, etc.



You failed to state your business, what the company does, and how he's in the field, vs you in the office, making sales,scheduling appointments, how large is the company, etc. A bookkeeper or accountant, lawyer, might also be helpful to pull together the books, show the profit/loss, and calculate various values relating to the company's operating health, as you look into the financials, you'll get a better justification for division of roles, responsibilities, and determine your various worth to the business.



Obviously without sales and orders, the company doesn't continue to operate. Labor costs help to determine the profitability, but in the end, it should come down to a pre-determined formula, not something garnered from people you've never met out on the internet.
anonimitie
2016-09-16 06:44:05 UTC
It's bad news that you're trying to figure this out retroactively. It should have been established before you lot got to work.



"I am just wondering what should be the percentage of profit to share with him..." How is that your decision? If you're partners, absent any other details in an agreement fifty-fifty. If you want to negotiate for more, good luck!
olliver
2016-09-17 10:49:35 UTC
Use a start up equity calculator to give you some ideas.


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