Hi,
I want to know how the profit sharing ratio should be in case of following scenario:
1. One partner is mostly an investor who's responsible for all fundings
2. Other partner is responsible for all day-to-day operations which is the backbone of business and doesn't invest anything other than administrative expenses
Please suggest, Thanks
Both the Partners have to play an important role in order to smoothly run the Partnership Business.
Hence it is advisable to share the Profit equally.
or
They can mutually decide the Profit ratio.
they can mutually agree on profit sharing ratio by including a clause in the partnership. advisable is equal profit sharing.
also they need to decide on partner salary & interest on capital to the 2 partners
CAclubindia
