4 ms·
I don't know but I believe that if he was getting paid more than his work was worth, then his distributions (aka paychecks) could be considered distributions of
by nobodysfool 13y ago
I don't know but I believe that if he was getting paid more than his work was worth, then his distributions (aka paychecks) could be considered distributions of owner's equity, hence he was being bought out a little bit at a time.
- grey-area 13y agoIf that wasn't explicitly stated, why would his friend believe that to be the case, since he already owned 1/3 and was also doing work for that salary? Normally ownership does not change without dilution, it has nothing to do with ongoing work. This kind of thing has to be spelled out in contracts - they should have set up a company and issued stock at the start, in most countries that is fairly straightforward, and it makes the legal position crystal clear.