Question

Does business partner "percentage" have to correspond directly to the income each partner put in their bank from that partnership?

Forum|Forum|3 years ago
April 27, 2022
1 reply
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For example, if a partnership makes $100, and partner 1 took home $25 of that while partner 2 took home $75, does the percentage of owner ship have to be 25% for partner 1 and 75% for partner 2? Or, is the percentage a more abstract condition that doesn't directly correlate to how much each person put in the bank?

A

Antomeister

According to the Canada Revenue Agency (CRA), The business partner percentage is what percentage of "rights" you have to the equity (And also the losses) in the business. Equity being whatever is left of the Assets after all liabilities are paid. The business profits/losses are divided among the partners based on the partnership agreement.

For more information, check out: Canada Revenue Agency (CRA) - Partnership

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