Exclusive HOLI Discounts!
Get Courses and Combos at Upto 50% OFF!
Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Nikhil bhagat (owner)     19 August 2014

Need help regarding partnership profits issue

Hi

This has always been a concern for me regarding profit distribution between partners. 

Considering a contract of film production where A is only a financier (sleeping partner) and B is both financier and working producer (active partner). A is interested to become a partner in B because the concept of the film is a sure shot money maker and the guarantees multi fold ROI.  A is investing 60% of total budget of project.

1) Main concern here is how the net profits should be divided. Considering 2 factors that , B is having an innovative and guaranteed concept and secondly B is will be working right from day 1 to day 200 till end the final product.  

2) In such case how much more percent should B get apart from his 40% investment. How much percent for the intellectual networth , i.e the "concept" and how much for his actual full time work for next 200 days.

Thanks in advance.....



Learning

 2 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     24 August 2014

For partner who invested, he can draw interest apart from equal ratio of profits in the business. 

Arpit lalan (Legal Consultancy/Advocate)     26 August 2014

So in your case to answer:-

1.  Main concern here is how the net profits should be divided. Considering 2 factors that , B is having an innovative and guaranteed concept and secondly B is will be working right from day 1 to day 200 till end the final product. 

B should charge a Lumpsum amount besides the profit for this innovative and guaranteed work and for working from day 1 to day 200. (or a percentage of the net income realised)

2.2) In such case how much more percent should B get apart from his 40% investment. How much percent for the intellectual networth , i.e the "concept" and how much for his actual full time work for next 200 days.

Now thats what b should decide. that how much is his intellegince wort. and his hard work. accordingly strike a deal for the same.

No matter what all of the above should be documented. Legal paper! registered deed!


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register