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Buachaill
Buachaill, Barrister
Category: Law
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Experience:  Barrister 17 years experience
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In a 50/50 owned business partnership, if the share of

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In a 50/50 owned business partnership, if the share of profits of one partner is, by agreement, more than the other partner gets, does this alter the 50/50 ownership of the partnership?
Buachaill
1. An unequal division of partnership profits does not affect the share of ownership each partner might have in the partnership. This is because the Partnership Act, 1890, allows partners to agree between themselves as to whatever division of profits they may wish without it affecting the share of ownership each might have and the consequent allocation of capital and assets upon dissolution. So, just because one of two partners in a firm may get a greater share of partnership profits this does not affect the 50/50 division of ownership within the partnership.
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2. This issue is most important upon dissolution because then capital is divided equally between the partners despite the unequal division of profits.
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