Profit sharing is just asking to get screwed really. Its way too easy to manipulate accounting to show a profit loss. One way quick and easy way to eliminate th

Profit sharing is just asking to get screwed really. Its way too easy to manipulate accounting to show a profit loss. One way quick and easy way to eliminate that possibility is to have your partner pay himself a salary + bonus that eats up whatever profit exists. Maybe you can account for that scenario in a contract, but ok now he goes and buys a company car, a nice Benz, or the latest super high end PC and Laptop when you guys are hardly bringing in revenue. He really needs that $5k Monitor from Apple. These are just the easy examples, dicking around with depreciation, capex vs opex... there is a giant bag of tricks that can be used to hide- or show- profitability. If you are going to go down this type route, a percentage of revenue is a much better idea. Its much more difficult to hide revenue.