Legal division of business profits upon sale

UPDATED: Oct 2, 2022

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Legal division of business profits upon sale

We have small business that we’re thinking of selling. The initial set up involved a monetary amount being contributed by both sides. Within contract it is stated both parties shall invest equal time in business and any help as necessary. One party has done nothing beyond initial investment. Legally, upon sale of said business, since said party did not live up to contractual responsibilities, are they entitled to any monies beyond initial investment if/when business is sold?

Asked on August 1, 2019 under Business Law, Oregon


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

How hard or equally the owners worked has nothing to do with how the proceeds or profits are split. They are divided strictly according to ownership. If you and the other side were each 50-50 owners of the business, you split the profits 50-50.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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