Finance Do All Partners In A Business Always Get An Equal Share Of Profits?

Good-Guy

VIP Contributor
When it comes to funding or financing a business, the general rule is that all the partners get an equal share of profits and the profits are divided by the ratio of investments each partner makes. This is mostly the case with big corporations or companies that provide dividends to shareholders on the basis or ratio of their investements in the company. The same can be said about other kind of business corporations that are based on partnerships. However, when it comes to finance or funding a business, I do not think that a person might always get an equal share because the working partner has the right to demand the salary apart from his investments from the sleeping partner. Do you agree that a partner has the right to ask for more profits?
 

Mataracy

VIP Contributor
Though in every company we use to have Active partner and Ordinary (passive) partners. I belive its not possible for the passive or ordinary partner to ask for the same profit . which means that the more you contribute the more profit you will receive vise versa. So An active partner do affect the business positively and can ask more more profit if need be.
 

funmi

Verified member
It is possible for partners not to share the same profits due to the input they have made in the business. Some business partners do not really contribute much money into the business while some contributed a lot. I believe the profits should be shared according to their inputs in to the business. The higher the investment, the higher the profits will be. So that no one will take more than what he or she ought to take.
 

Alexandoy

VIP Contributor
A partnership is a business owned by 2 or more partners. When I was in college the number of partners is 8 for the maximum. The partners can have a different amount of share of the business depending on their agreement. The ownership is stipulated in the registration of their partnership business so everything would be clear.
 

Mika

VIP Contributor
Partnership business means you share profits and losses, How much profits and loss you share depends on the clauses of your partnership and the percentage of your share in the company. If your partnership is 50-50, you share equal profits and loss, if it is 40-60, where 60 percent is your stake, you share 60 percent profit or loss.
 

Good-Guy

VIP Contributor
I believe that one particular partner may get profits with an equal share ratio and also get salary from other partners if that one partner is a working partner. This is because apart from investing funds, this one particular partner is also working to maintain and sustain the business. I believe there is nothing wrong for a partner to receive salary for his or her efforts.
 

Good luck

Verified member
It depends on the initial agreement on such business,if there is a mutual discussion that the profits will be shared equally then there is nothing stopping them from getting equal amount of money when the profits arrive but if one of them finance the business by contributing a large quota for the business,such person will decide how the profits will be shared.
 

Chibson

VIP Contributor
Before a business will start all the members of the business will have to sign a contract and make an agreement. the amount of money you get will definitely depend on the amount of income you invested in such business. People that invested much will always make more money than people that invested less.
 

kayode10

VIP Contributor
I don't think all partners will get equal share in the profit of the business they established. I think the profit sharing with the pen on the resources each of the business partners are bringing to the table. I think it would be very important for all of them to come to the table and designed the profit sharing formula for every business partner. They should make agreement to avoid conflict in the future.
 

Abigael

Valued Contributor
Yes, I think it is the right of active members to ask for better salary from the business. This is because they are doing more work than the passive members. In fact this active partner should receive first his share according to the decided ratio of what each one contributed. Then get the labour's salary differently.
 

Chibson

VIP Contributor
I believe the amount of share you receive in a partnership business depends on the amount of money you invest and also the amount of time you put to make the business successful.

Normally, before kick-starting this kind of business it is always important and necessary to have an agreement. Without an agreement crisis may erupt which is not really good for the continuity of the business in the near future.

That is why if you want to venture into this kind of business you should always do so with people who are very much trusted and business-minded so that troubles will not come up in the near future to hinder the business's growth.
 

Lens1000

VIP Contributor
All partners do not always share equal amount of money from the profit that was made in the partnership business. The amount of money to be sheared will depend on the contribution that was made by each and every partners that is participating in the company. The giant shares will be received by people with lower amount of money. Of course, you don't expect them to receive same amount of money because the amount invested in that business are different. This is how profit in partnership business are shared and if you really want make big amount of money from partnership investment, you will need to invest huge amount.
 

Augusta

VIP Contributor
I don't think this will be right so partners should not share the same profits due to the input they have made in the business. This is because Some business partners do not really contribute much into the business while some will put time and money I mean the contribute a lot. others might just contribute only contribute money which is not good enough

So for me I think the profits should be shared according to their level of in to the business. The higher the level ofb,commitment in the business, the higher the profits that should be accorded the person.
 

Yusra3

VIP Contributor
No, business partners do not necessarily receive equal shares of profits. The percentage split is negotiable based on the partnership terms and can reflect the proportion of ownership, investment amount, or responsibilities of each partner. For example, a 60/40 split means one partner claims 60% of the profits while the other gets 40%. The split can incentivize greater contributions from certain partners in driving the success and profitability of the overall business.
 

Leah Kelvin

Member
In business partnership, how profits gets divided may vary depending on the conditions agreed upon by the partners. Splitting the profit equally between the partners is not always used by some people. The distribution of earnings depends on such things as each partner’s contribution, their respective roles and obligations and the terms set down in a partnership contract. However, deciding about sharing benefits derived from a business activity is subject to bargaining among co-owners of an enterprise.
 
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