Partnership Percentage Help: 50% to myself and 30% to my partner. 20% of the remaining profits are left in the company account.

[offgriddev]

Hello,

My partner and I own a business. Profits are paid out: 50% to myself and 30% to my partner. 20% of the remaining profits are left in the company account.

Our accountant says to payout the remaining amount of money inside our company bank account and I want to pay it fairly based on our 50% / 30% amounts.

What would the new percentages be to payout to myself and my partner.

Any help is much appreciated.

Thanks,

-Andrew

 

[stapel]

My partner and I own a business. Profits are paid out: 50% to myself and 30% to my partner. 20% of the remaining profits are left in the company account.

Our accountant says to payout the remaining amount of money inside our company bank account and I want to pay it fairly based on our 50% / 30% amounts.

What would the new percentages be to payout to myself and my partner.

If you pay out the remaining 20% as half to you and only 30% to your partner, you will not have paid out the entire amount, as 20% of 20% will still be on the account. So kindly please clarify what is meant, technically, by "fairly" and "based on our 50% / 30% amounts". Thank you!

 

[lev888]

Hello,

My partner and I own a business. Profits are paid out: 50% to myself and 30% to my partner. 20% of the remaining profits are left in the company account.

Our accountant says to payout the remaining amount of money inside our company bank account and I want to pay it fairly based on our 50% / 30% amounts.

What would the new percentages be to payout to myself and my partner.

Any help is much appreciated.

Thanks,

-Andrew

You need to split the remaining funds according to the 5 : 3 ratio. Divide the amount by 8 (5+3), take 5 "parts" and give the remaining 3 to the partner.

 

[Steven G]

As lev888 is pointing out, for every $8, you get 5 and your partner get 3.
Out of curiosity, what did your accountant say?

 

[offgriddev]

Hey everyone. Thanks for the help. LEV888 was on point and it was the same as our accountant said.

I'll give a made up example as I don't want to use real numbers:

Lets say we had $10,000 in profit during the course of the year. by the end of the year I would get 50% ($5,000) and my partner would get ($3,000). This means there is $2,000 remaining to be divided.

Using the example from Lev888: Split the remaining $2k into 8 parts ($2,000/8=$250). Then, payout the parts based on the 5:3. So, I get $1250 ($250x5) and my partner gets $750 ($250x3).

That means my actual percentage was 62.5% ($5,000+$1,250=$6,250) and my partner was 32.5%.

My account said the split was 62/38 but im ok loosing the .5 lol

Thanks for all the help ??