If a business agreement states that each member’s capital contribution is 50% but profit and losses are allocated 85/15, does that indicate ownership is 50/50 or 85/15?

When selling the business would proceeds from the sale be split 50/50 or 85/15? If liquidating would it be 50/50 or 85/15?

Asked on March 29, 2014 under Business Law, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Based upon what you have written, it seems that once the return of one's capital contribution is received, the profits on a yearly basis or a sale are split 85%-15% which does not make a lot of sense since capital contribution is equal. I suggest that you consult with an attorney to review the business agreement in your locality. One can be found on attorneypages.com.

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