Profit sharing and no liability of loss

Querist : Anonymous (Querist) 12 May 2022 This query is : Resolved
An investor has invested in the business and I am supposed to run/manage the show. I will not be paid any salary but will have a fixed percent of share in the profits.I will have no liability of the losses. Is this kind of partnership valid?

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This discussion explores a business partnership structure where one partner invests capital while the other manages the business. The working partner receives a percentage of profits but is not liable for any business losses and will not receive a salary. The validity of such an arrangement is confirmed, with advice to formalise the terms and conditions in a written agreement, potentially registered with the Registrar of Firms.

kavksatyanarayana (Expert) 12 May 2022
The investor as a partner(A) and your self(B) as a working partner without investment shall execute and mutually agree to the terms and conditions on the Stamp worth Rs.500/- and get it registered before the Registrar of Firms though it is an optional registerable.

Advocate Bhartesh goyal (Expert) 13 May 2022
Yes, it may depend on terms and conditions mutually agreed by partners.

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