How do you divide the profits among four people?

Question

Ok....so there are four people involved iin a business.
Person A- is the webmaster and mastermind for the business and he contributes $500 to start the business

Person B & C- Contributes $500 each as well

Person D contributes $250 to start the business.

How much % should each person recieve towards the profit?

Person B.C & D are just contributing the money..while person A is in charge of web design and bringing the traffic.

Answer 1

As person A is the brains behind the company, he should have a greater share as he is the one that is generating the profit. Without a, the company wouldn't existPersons B and C have both investedthe same and should therefore receive the same share of profit, unless either B or C actually does some work withing the company then he / she deserves a higher share. Person D should receive 50% of B and Cs basic share, unless D works within the company which then he / she would deserve a higher share. Before dividing the profits, you have to consider other factors. If I had started the company and was the brains behind it etc. I would want a 40% share. Any person that is only an investor should only receive a dividend based on the company's performance. 10% of profit would be a fair return to the investors as there are only three of them that the 10% has to be divided by. If the company has performed well, they will easily exceed their initial investment within the first year. It's probable that for a maximum $500 dollar investment, they should have gained their initial investment plus at least another 100% or more. That is a good return! After dividing the 10% amongst the three investors and A banking his 40%, I would put 30% aside towards next years running costs and the other 20% should be kept as a reserve fund (reserves) for any future expansion and / or any times of recession etc. If you divide all profits now and the company sees a slow down of orders etc. it could collapse the company thus putting it into liquidation, that is why it is vital that you reinvest a good bulk of the profit.

Answer 2

Somwone145 is exactly right with the percentages, if you are going to split the profits by the amount of money put in. If you are going to reward person A for being the mastermind, you could pay him a salary for his work as webmaster, and then still divide up the profits afterwards.

Answer 3

It depends on their roles and what they bring to the project, not just how much money they invest.

For example, if person D is the sales person and brings in all of the actual paying customers, they could justify getting a higher split because without person D, no one make money.

You all need to have an open discussion about what part each is playing. The money should factor in, but not be the only factor.

Answer 4

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Answer 5

20% goes to person A,15% to B&C, 10% to D and 40% to the business.

Answer 6

if they have not decided every partner must get equal share in the profits
BUT if we take it according to their contribution of capital then A,B,C,D must get profit in the ratio of 2:2:2:1

Answer 7

I would devide A-30%,B- 25%,C- 25%, D-20%

Answer 8

according to how much each puts in (not the labor)

it should be

A - 28.571%

B - 28.571%

C - 28.571%

D - 14.286%