Appellate Practice Attorney serving New York, NY
Whether you are an owner (shareholder) of the corporation, or merely an employee, your compensation is whatever you agreed to. If your employment agreement (even if it is not in writing) provides that you are entitled to a share of profits, you are. If you were a shareholder, and the shareholder's agreement provided that you were entitled to a particular share of profits, you would be. As a general rule, if you never discussed profit sharing before you took the job, a shareholder would be entitled to a share of profits (generally in proportion to what that shareholder invested, which could depend not only on money invested, but also time, effort, and expertise), and an employee would not.
Answered on Dec 28th, 2012 at 10:22 AM