Question

Becca and bob own a car rental business. becca contributes 75 percent of the capital but does only 20 percent of the work, while bob contributes 25 percent of the capital but does 80 percent of the work. both decide on a 50/50 allocation of profits. in which types of business structures would this arrangement be possible?

Answer 1

This would only be available in limited liabilities and partnerships. S corporations must allocate profits in direct proportion to the shareholders interests, however LLC's and partnerships can allocate profits however they see fit.