Can I recoup my initial investment in a partnership?
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Can I recoup my initial investment in a partnership?
I started a verbal partnership. I put up the cash to fund the payroll until the
business was able to sustain the payroll. My partner used his business license.
We both work the business. In a 50/50 partnership in this case, is the investment
capital part of the 50/50 partnership or is the profit and lost part of the 50/50
partnership?
Asked on October 15, 2018 under Business Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
When you invest in a business in exchange for a share or ownership interest in the business, as was the case here (it made you a 50-50 partner), you do not have a right to reimbursement or recoupment of the investment: it was an investment, in exchange for ownership, not a loan. You are entitled to participate 50-50 in the profit (if any) from the company, and could get a 50% share of any losses to use as a tax deduction (speak to your tax preparer or CPA about this).
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