How does the profit sharing work among partners in a Pvt Ltd company?
Let me answer that point wise1. You're not keeping much here for company expansion and future strategy plans, advertising/marketing budget, etc. This may not be feasible long term, and short term you'll only see very small numbers. I suggest instead of that you take a salary once there is reasonable profit which is also easier during filing, etc. 2. You cannot. Any money you give your company is a loan, and requires some basic paperwork. You can't take 5L out, put 3L back, take out 2L again, etc - it muddies the balance sheet and will cause you auditing troubles. There are ways around it, but those are indicative of money laundering so you again your auditor will be quite annoyed when it comes to proper filing. 3. You should sign a Memorandum of Understanding and ensure that he's clear on his role and responsibilities. Penalty clauses must be there. If he's not performing, you want that money back! And the shares. Talk to a good lawyer and make it air tight. 4. If he needs money, you can give him or if you need money he can give you. Avoid taking cash out of the company account unless it can be written off as a reasonable expense. You can pay salary in a fragmented manner (eg. salary of 5L/mo can be paid as 4 lacs in one month and 6 lacs in next month) 5. If you do the Memorandum of Understanding (MoU) bit you can kick him out.
How does a company share the profit with three partners?
Martha is right. I guess you are failing to understand that you dont have any stake in the company. You may be getting 50% of the profit now. But anytime, you can be kicked out of the company as you dont have any stake in the company. First, you have to make things right by getting some shares allocated to yourself. Post that, you will have to do valuation of the company. Once you have arrived at the value, you can allocate some shares to X based on his investment. Say for eg, if the company is worth a Million dollars, and if X invests 300,000 dollars, you can give him 30% stake. And as Monish suggested, you can vest some shares in the name of X over a period of time
How do I keep the ownership of a PVT. LTD. Company and also share the profits with the founding members in India?
You can keep 60% ownership if you have mutual understanding among the founders. You can draft a Cofounder Agreement where you can clearly mention the shareholding pattern of the company, Profit share of every director and also roles & responsibilities of every cofounder. In the agreement you can mention though you hold 60% of shares you may be willing to share higher percentage of profit with your other cofounders by way of them being working partners. Having said that you have to be very careful in getting your cofounder agreement made because it is a very critical document which establishes your ownership in the company. Hence contact lawyers who have litigation experience in addition to exposure in corporate law for better drafting of the agreement. Wazzeer, with their wide partner network can help you out in this.PS: I'm part of the core team at Wazzeer.com
Harmful Effects of genetic engineering? Human designing !?
Can you think or list some Harmful Effects of genetic Harmful Effects of genetic engineering, if possible ... please list web-sites (links), books names... and i would aprciate the best as possible ... thanks in advance
Which one is best, a proprietor or a private limited company?
Sole Proprietorship: – Run by a single person and is generally employed in traditional businesses. More of a one-man-show which is not scalable beyond a certain point. Additionally, there is no statute or law which governs its registration and functioning.Private Limited Company: – Formed by at least two shareholders and directors, it has Equity shares instead of a Profit sharing ratio. The word 'Private' denotes that the pubic cannot be invited to purchase its Shares and the 'Limited' denotes that the Liability of the Shareholders and Directors is Limited. It is a compliance-heavy entity.Please refer to the following tabulation:Sole Proprietorship has no formal registration process, it has minimal or no compliance requirements and works out to be more tax friendly than a Private Limited. However, if you are seeking to fulfill the above mentioned points^, you should not hesitate to form a Pvt. Ltd.Also, a Sole Proprietorship projects an impression of a one-man show. It lacks credibility and big corporations sometimes prefer working with Pvt. Ltd. Companies or LLP’s over Proprietorship Firms.To conclude, a Proprietorship is optimal for small-medium scale businesses.For large scale businesses (wherein there are partners and a team employed) it is preferable to create a Separate Legal Entity that has Limited Liability and Perpetual Succession.Feel free to comment here or contact us on + 91 79778–63125 / info@businessguru.co.in if you still have doubts.
How can you share ownership of a company between 3, with 1 being a major shareholder?
First advice: Dont get into the trap of wondering what is fair, or even worse, what your net worth is, because of the amount of equity given.Now, there is absolutely no straightforward answer to this. There are cases where this is perfectly justified, if the person with the idea also brought in the money, contacts etc to run the business.My advisor walked me through a simple rule. Take all three folks, imagine the business, and start removing one person at a time and see when the business completely disappears. You will realize that more often than not, not everyone is as equal as its thought to be.Keep your egos out of the door and put the good will of what you are going to create at the ultimate goal. Ponder who all brings what to the table, and if that aligns to the percentage they are holding. Sit and talk about it, and see if it makes sense to everyone, if not atleast salvage a relationship.Most often people focus on what everyone is getting rather than focusing on their bit. If indeed you are given 24.5% of the company, and I presume that this is something you believe in, to become big and valuable, does that justify the effort that you will have to put in. What others are holding (51% or not) is really a distraction, not a path to understanding if you are getting a "fair" deal.There is someone who put together a rough tool called Equity Calculator. Its very very rough, but it will get you to think what else goes into building a business.http://foundrs.com/calculator/in...Good luck.