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May 25, 2012
Mark Clayton: Is Hillary's State Dept. hacking Al Qaeda? Not quite
Erika Bolstad: Temple cancels Wasserman Schultz speech
The Kosher Gourmet by Ethel G. Hofman: The former president of the International Association of Culinary Professionals, whose members included the likes of Julia Child, is back with contemporary Shavous cuisine: Ruby Fruit Soup, Sweet Noodle Kugel with Cheese, Key Lime Curd, Calsone Casserole Frittata with Wild Mushrooms, Sun-dried tomatoes and Olives, Baked Tilapia with Pepper Cheese Cream and Brown Sugar Shortbread
May 24, 2012
Jeff Jacoby: The peace process battered Israel's reputation
Michael Muskal: 'Pro-choice' position hits record low, according to poll
Chris Farrell: Are We in a Tech Bubble?
The Kosher Gourmet by Penelope Wall: PHILLY CHEESE STEAKS --- hold the steak!
May 23, 2012
Tony Pugh: More private colleges offering tuition discounts
Mary Beth Franklin: How to Choose the Right Annuity for You
Tina Susman: The wig wasn't enough: Man gets 13 years for posing as his dead mom
The Kosher Gourmet by Emma Christensen:A simple way to do fish right
May 22, 2012
Warren Richey: Can US group challenge overseas surveillance act? Supreme Court to decide
Thomas M. Anderson: Walking Away From a Mortgage
The Kosher Gourmet by Megan Gordon: Enjoy a celebration of the most rich and layered flavors: Black bean, sweet potato and quinoa chili
May 21, 2012
Mark Clayton: Cybersecurity: How US utilities passed up chance to protect their networks
Howard LaFranchi: NATO summit: Who will foot the bill for long-term Afghanistan security?
Chris Farrell : Earn Dividends in Emerging Markets with This WisdomTree ETF
Stephen Whiteside, Ph.D. : Mayo Clinic Medical Edge: Social anxiety disorder --- or just shy?
Guy Jackson : Victim's father regrets death of Lockerbie bomber
The Kosher Gourmet by Mario Batali: Famed chef's veal shoulder farsumagru: A festive meat course for late spring
May 18, 2012
Rabbi Berel Wein: Striving: The People of the Book's Book for (All of) the People
Steven Goldberg: 5 Great Stock Picks and the Exchange-Traded Fund that Owns Them
Mary Pickett, M.D.: Ask the Harvard Experts: Don't be forced into gluten-free lifestyle based merely on a doctor's false-positive test
The Kosher Gourmet by Carolyn Malcoun: DIY healthy lunchbox treats: HOMEMADE FRUIT BARS for kids and brown-bagging adults alike
May 17, 2012
Warren Richey: Teacher fired for being unwed and pregnant can sue religious school, court rules
Josh Mitnick: Netanyahu's 'centrist' coalition is already proving it's anything but
Steven Goldberg: Earn Dividends in Emerging Markets with This WisdomTree ETF
Amina Khan: Research links coffee to lower death rates
The Kosher Gourmet by Faith Duran : Cheesy Potato Breakfast Casserole with Cheddar and Sun-Dried Tomatoes
May 16, 2012
Carmen Terzic, M.D., Ph.D. : Mayo Clinic Medical Edge: A variety of exercises can help improve balance
Melissa Healy: National strategy on Alzheimer's disease aims to halt it by 2025
The Kosher Gourmet by Joyce White : GOODNESS GRACIOUS: GREENS! 4 winning recipes that are no longer just for down-home folks (Includes expert tips & techniques)
May 15, 2012
Kristen Chick: Obama administration resumes arms sales to Bahrain despite serious unresolved human rights issues. Activists feel abandoned
Pat Mertz Esswein: Homes are now affordable again and mortgage rates are low. What you need to know before you buy
Kathy Kristof: Our Practical Investor Fights Inflation with These 6 Investments
Sue Hubbard, M.D.: The Kid's Doctor: Lactose intolerant young child? Check again
The Kosher Gourmet by Kathy Hunt: Spread a Little Excitement with EXOTIC CONDIMENTS (4 RECIPES)
May 14, 2012
Lisa Gerstner: How to Protect Your Identity, Finances If You Lose Your Phone
Harvard Health Letters: Heart disease and dementia
The Kosher Gourmet by Megan Gordon: MANGO COCONUT OAT MORNING MUFFINS are a bright but hearty delight
May 11, 2012
Jessica L. Anderson: Get the Best Deal on a Used Car
Jett Stone: Forget face-lifts and fake knees. Scientists have seen the fountain of youth --- and it's broccoli
The Kosher Gourmet by Chef Mario Batali: The famed chef's vegetable dish that tastes true to the season: FAVAS AND SUGAR SNAP PEAS WITH POTATOES AND TARRAGON
May 10, 2012
Sergei L. Loiko: Putin sends warning to U.S., NATO in Victory Day speech at Red Square
Mary Rourke: How being a 'mentch' got Vidal Sasoon his start and fighting in Israel's War of Independence provided him with confidence and a strong sense of his own identity
Jeff Bertolucci: Get Home Phone Service for Less Than $10 a Month
The Kosher Gourmet by Betty Rosbottom: Gleaming with its golden, crimson, and snowy white hues, this silken smooth and creamy STRAWBERRY ORANGE TRIFLE looks impressive, but is easy to prepare
May 9, 2012
Sharon Palmer, R.D. How you can reduce your risk -- or delay -- chronic diseases associated with aging
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Jewish World Review
Equal partners who aren't
By
Rabbi Dr. Asher Meir
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http://www.JewishWorldReview.com |
Q. When my friend and I began our partnership I anticipated our contributions would be about equal. But now I see that despite all the efforts of my partner, it is my abilities that are really responsible for our business success. Am I entitled to a larger share of the profits?
A. Partnerships are a most practical and durable form of business relationship. They have persisted in little-modified form since ancient times. When two people work together, they share risk and knowledge and take advantage of specialized abilities. The Talmud has a concise expression of the advantage of working in tandem. When explaining why a partner is not allowed to unilaterally break off the relationship before the stipulated time, even if he is willing to share in any losses, the sage Rava states succinctly: "The luck of two is better." (1)
While partnerships were known in the era of the Talmud, in later times and in particular with the flourishing of Jewish commerce in medieval times they became an immensely popular arrangement, and in the responsa literature we find a very highly developed legal theory of partnerships. One principle we find consistently is that in the absence of any explicit agreement, the assumption is that profits are shared equally. Thus we find in the Talmud:
Shmuel stated: Two people who mingled funds [for a business – even] if one invested one hundred and the other two hundred, the profits are shared equally. (2)
The business logic behind Shmuel's statement is that in most partnerships the efforts of the partners are a much more important contributor to success than the amount of money initially invested, so unless there is an explicit stipulation to the opposite we should assume that the intention was to split profits equally.
Naturally that doesn't mean that one partner can shirk and leisurely share in the profits of his hard-working partner. One of the great medieval authorities, the Rashba (Rabbi Shlomo ben Adret) writes that if a partner contributes only minimal efforts, this is considered a fundamental breach of the partnership agreement, and the partner is not entitled to a share of the profits. He is at most entitled to a modest salary for his efforts. (3) The opposite can also happen: if one partner invests efforts or resources that are clearly above and beyond what is called for in the agreement, he may be entitled to extra payment, in the form of salary or reimbursement, for his efforts. But he does not get an enlarged share of profits.
What all of these sources have in common is that the presumption of equal share of profits is a nearly unshakeable one, as long as there is no breach of the agreement. Even if the contributions are unequal, in money or in effort, they are either ignored or dealt with outside of the profit-sharing arrangement.
The situation you describe is common and perhaps even the norm in new businesses. When a business is founded, no one knows where the winds of commerce will blow. Who could have known, when Apple Computer was founded by two friends that in the future being a brilliant programmer and engineer like Stephen Wozniak would become virtually a standardized input, whereas being able to imagine the future of the market would become the main source of profitability? In other industries the opposite happened: the market went to people who could respond to the market with solidly designed products, not those who could anticipate the market. When you and your partner went into business together, you in effect purchased equal shares of stock; your increased contribution cannot change that reality.
On the other hand, if you really believe that your contribution is the key to your business' success, then you have the right to go off on your own. Assuming you didn't define a specific term for your partnership, it can be broken off at any time. Of course dissolving a partnership can be a complex matter; when there is a going concern typically one partner will have to buy out the other, and the valuation of the company can be as contentious as the valuation of the partners' contribution to profitability. Perhaps this is really the best course of action for you, or perhaps the prospect of having you do so will persuade your partner to make some changes in your agreement.
However, as long as you continue doing business under the original understanding, and as long as each partner continues to contribute his best efforts to advancing the business according to what was originally demanded and expected, changes in the conditions of the partnership can be made only by mutual consent of the partners.
SOURCES: (1) Babylonian Talmud, Bava Metzia 105a (2) Babylonian Talmud, Kesubos 93a (3) Responsa Rashba III 142,144 cited in Beis Yosef, Choshen Mishpat 176
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JWR contributor Rabbi Dr. Asher Meir, formerly of the Council of Economic Advisers in the Reagan
administration, is Research Director of the Business Ethics Center of Jerusalem, Jerusalem College of Technology.
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