17/10/2026
What happens when business partners disagree about profit sharing?
Imagine two friends start a café. One invests ₹10 lakh, while the other manages daily operations. They initially discuss a 50:50 profit split but never document their understanding.
When the business becomes profitable, disagreements begin.
This is why MOU signing and appropriate business documentation matter. Clearly recording responsibilities, financial arrangements and exit terms can help reduce misunderstandings.
However, when establishing a partnership, an MOU alone may not be sufficient. A properly drafted Partnership Deed may be needed.
What would you do before starting a business with a friend?