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Are profits split according to the percentage ownership in the LLC or corporation?

April 26, 2017corporation LLC ownership PERCENTAGE profits Split

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Are profits split according to the percentage ownership in the LLC or corporation?

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Not necessarily, this is a common misnomer. Profits do not have to be split in the percentage of ownership. The board of directors can decide to pay out profits in the form of bonuses to the officers rather than to the owners. Further, the board of directors can pay investors a percentage of profits on a per project basis or other arbitrary agreed upon criteria.