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05/24/2012 at 04:51PM PDT
Important Announcement! A planned system-wide upgrade will take place over the Memorial Day Weekend in the US (From Thurs, May 24, 2012 at 6 pm PDT thru Tues, May 29, 2012 at 5 am PDT). This includes QuickBooks, QuickBooks Payroll, Point of Sale, & Salesforce.com. This is only for US based products. This does not affect QuickBooks Online customers! During this time, you can shop, but can’t place orders online, activate products or update account info. We apologize for the inconvenience & thank you for patience while we improve our infrastructure to better serve you. International versions are unaffected. For more info, see our community discussion.
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paul350
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05/19/09 9:15am PDT
Viewed by asker 05/20/09 7:47am PDT

Best way to split profits between f/t owners and p/t owners?

S-Corp.2 couples, wives own company 50/50, all profits/expenses currently split 50/50, all 4 people working hard in biz yet all have other full time jobs. 1 husband wants to leave his full time job and do the business full time. This husband will of course need to get paid a commission on sales he procures to pay his bills. He says he needs a sales commission of 50% of the company profit per sale to survive. He and his wife will then also receive 50% of the companies profits at the end of the year. This effectively gives him a 75/25 share of the profits. While this husband will be doing most all of the sales work and bringing in almost all of the income, the other 3 people will be workig on the backend (books, compliance, web design, etc...) What is a better way to get this husband his money so he can pay his living expenses yet allow the rest of us to be compensated at years end appropriately? I was thinking that as he made his sales and took the 50% commission upfront that this would be sort of an advance against his wifes half of the company. Otherwise my wife and I will only receive the remaining profits after all expenses have been paid by the company at years end minus 50%. Any ideas on how to more fairly compensate for his much needed living expenses yet keep the company more fairly split?

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Jennifer Brazer
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Jennifer Brazer
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05/27/09 9:21pm PDT
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Maybe set up a commission structure that is offerred to all across the board. Whoever brings in the work gets the commission, this is separate from salary or profit sharing. Second, pay fair compensation to all involved for the work performed in the form of part-time and full-time salary or hourly pay, this is fair to all. Lastly split what's left at the end of the year (profit share) based on the equal shares each of you owns in the company.

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