We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
Partnership profit distriputon agreement, need help with ideas
Hi Everyone, I am going into a 50/50 partnership with one other person. We want to make things equitable based upon percentage we bring to the bottom line. We are trying to spell out compensation issues such as; if someone brings a new client then that person should be compensated for doing so. If one partner is doing most of the paperwork and backend operations, obviously they are not able to find as many new clients. Thus looses out on that part of the compensation. We visited the local SCORE office and our counselor recommends we split the "pie" into four pieces, distributed in the order: 1. Expenses = come off the top for, well, expenses 2. Commissions = based upon output and contribution to bottom line (new clients etc.) 3. Salary = based upon an agreed hourly rate to be paid for the amount of time spent on company tasks. 4. Profit = 50/50 - split of whats left. Does anyone else do something like this? It seems awfully accounting intensive. Does anyone have an example of an agreement I can use as a template or any more simple arrangements? Thanks a bunch in advance to everyone. Mark
Sign In or Register to comment.