Hey guys I need some advice. You have a business proposal that sounds cool and sound. Two partners,you provide the capital while your partner fully runs the business......question of trust already settled,what should be the profit sharing ratio?

The chief value of money lies in the fact that one lives in a world in which it is overestimated.

We need to be partners but he aint raising any part of the capital!!!!


The chief value of money lies in the fact that one lives in a world in which it is overestimated.

Yeah sasha,if hes not contributing capital then he's not a partner but the manager of the buisiness and salary should do. If he really does want to be a partner he can do so in the future if you could come up with an arrangement which can be easy if you do sell him a fraction of the buisiness by re-coup some of his salary into the buisiness. Eg if you do invest 400k in the buisiness as capital and you decide to pay him 50k on salary,you may give him 40 if he's happy and retain 10k. After 10 months you might could stop paying him salary and instead you start sharing the profit in the ration of 3:1 talk thats the only way he can become a partner if he doesnt have money to contribute the capital currently

Life is like an onion; you peel off one layer at a time and sometimes you weep. Carl Sandburg

@mcreggae.......how much would you pay for the business proposal? To start with,get the fair market value of that business plan based on professionally written business plans,take this value as the initial capital contribution from your partner.........calculate the ratios of your contributions into the biz..........and use this ratio in sharing of profits & losses....then agree on the salary of your partner based on his professional skills,ability and market rates; his salary should not be incorporated as capital contribution but as a business expense before profit/ loss computation........my two cents

don't expect anyone to act like your favourite grandmother in wanting what's best for you.

You can agree on the structures within which you want to run the business,e.g you can come up with profit sharing ratios by quantifying in monetary terms the services of the partner who runs the biz vis a vis the capital you contribute. one way of doing this is to come up with a salary structure. Assuming the salary payable to the partner running the business is 50k and you contributed 500k as initial capital,we can capitalize his salary and assume he/she owns 50/550% (i.e new capital is 500 + 50 = 550) of the business therefore the P/L sharing ratio would 1:50/550,second month the ratio changes to 1:100/600. etc.. by so doing,the business is growing and the sharing ratio moves to par with ease..

My two zim cents

Its just me whatever choice you make in life make sure that you can live with it.