# profit sharing and capital investment among partners



## chard (Oct 14, 2008)

hi! just want to ask how are you going to split your income and payment for the capital investment with your partner..say i invested 40K and my partner invested 60K and we decided that our profit sharing is 70% and 30% respectively..if we have a 150k profit, what are we going to do with it saying we havent paid back any of our capital investment..


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## kimura-mma (Jul 26, 2008)

If you haven't paid back any of the capital investment, then you don't have 150k *profit*. You have 150k *revenue*. Revenue minus expenses equals profit. So you would pay back the initial investments, 40k to you and 60k to your partner, and the left over profit gets split 70/30 as agreed upon.


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## chard (Oct 14, 2008)

thanks for the reply..what if we only have 50k revenue..how are we going to pay our capital investment?do we split it equally or by percentage like 20k and 30k?


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## kimura-mma (Jul 26, 2008)

Well the percentage you agreed to is null and void. That percentage was based on profit sharing and there is no profit. I assume there was no clause in the agreement as to handle the split based on losing money, so I would say a 40/60 split is appropriate since that is what the initial investments were. In this case, you would get 20k, your partner would get 30k, each losing half your initial investment.


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