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Can firm pay commission based on net profit to non partner ?

This query is : Resolved 
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(Querist)
23 May 2016 Hello everyone,

M/S AB is a firm. Mr Z has good contacts and he can get business to the firm. But he don't want commission on transaction wise he want a specified % of net profit without being a partner.

Firm is planning to enter into MOU for the Same.

Is firm steps correct ????
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
23 May 2016 Sharing of profit to other than a partner of the firm under the nomenclature '% of net profit' is against Indian Partnership Act,1932.
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ankit

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ankit (Querist)
23 May 2016 If it is not firm but LLP then can they do so ??
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ankit

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ankit (Querist)
23 May 2016 What is the way out ??
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Amol S Joglekar

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Amol S Joglekar (Expert)
23 May 2016 sharing the figure of profit with a non member/partner is not a prudent policy.
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