10-29-2009, 02:22 AM
In the beginning of a business, is it better to put all the initial costs to Assets and depreciate, OR to show a huge loss.
I have started a partnership business, with one of my friend. I will be the working partner and will be paid working @ 15% of net profit and profit margins are ME 25%, FRIEND 75%.
I am having huge loss in the first month due to which I will not get any working amount neither profit this month as well as next month, because losses will be covered in next month.
What should I do to make it beneficial for me
1. Should I put initial expenses into Capital of ME?
2. Should I put initial expenses into Capital of FRIEND?
3. Should I expense out these initial expenses and bear 2 months loss zero earnings neither working?
What should I do to make it beneficial for ME as well as my partner FRIEND, please suggest.
I have started a partnership business, with one of my friend. I will be the working partner and will be paid working @ 15% of net profit and profit margins are ME 25%, FRIEND 75%.
I am having huge loss in the first month due to which I will not get any working amount neither profit this month as well as next month, because losses will be covered in next month.
What should I do to make it beneficial for me
1. Should I put initial expenses into Capital of ME?
2. Should I put initial expenses into Capital of FRIEND?
3. Should I expense out these initial expenses and bear 2 months loss zero earnings neither working?
What should I do to make it beneficial for ME as well as my partner FRIEND, please suggest.
