Lori and Dan own a small restaurant as partners.Dan works several hours a day cooking,waiting on tables,doing the books,and so forth.Dan believes he is entitled to be paid at least a standard wage for all his work since,at the present time,the part-time kitchen helpers earn more than he does! Lori claims Dan is not entitled to anything other than one-half the net profits.Is Lori right?

Question

Quizplus · Accepted Answer

Partners in a partnership may agree to pay themselves a salary or wage for work done on behalf of the partnership, but it must be explicitly agreed upon in the partnership agreement. If there is no agreement allowing for payment of wages, partners are only entitled to their share of the net profits. Therefore, Lori is correct that Dan is not entitled to a standard wage unless it was agreed upon in their partnership agreement.

Lori and Dan Own a Small Restaurant as Partners