EMPLOYEE OR PARTNER?


Beliefs & Practices, Live like brothers Deal like strangers / Monday, February 2nd, 2009

Therefore if more than one person works in the same business, it should be established from the very beginning as to what each one’s position in the business is. If a son has joined his father in the business, it must be established from the very first day as to whether he is merely helping his father as a favor, or whether he is an employee, or has he joined as a partner? If he is just an employee, his salary must be clearly stipulated. It must also be clearly mentioned that the son in this case has no share whatsoever in the ownership of the business. If he is being made a partner, firstly it is a condition that he invests something into the business. If the son does not have any capital of his own to invest, the father could give him an amount as a gift. He would then invest this amount into the business and purchase a share therein. All these matters should be reduced to writing in the form of a partnership agreement. The share of profits that each partner would be entitled to should also be explicitly mentioned so that there is no problem later on.

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