Hi All,
I am a new member and am needing some advice on the profit sharing for a CC.
There are two members for this CC - 40% and 60% respectively.
The 40% Member has been paid a salary for this last financial year
The 60% Member has been paid nothing this last financial year.
The profit is currently R580k before tax - after tax R417600.00 (28%)
Do we declare a dividend on the R417600 amount? R83520.00 (20%) = R334k
Does the salary the 40% member drew during the year (R200k) be added back onto the profit before working out the profit share? IE R334k plus R200K = R534K
Therefore:
R534K / 60% = R320k due to the 60% member
R534K / 40% = R213 - R200k salary paid during the year = R13k due to the 40% member
Do these amounts due to the members also attract income tax when paid to the them?
As the 60% member is due a large amount - can he take this money on a monthly basis in the 2018-2019 tax year as a salary (if he must pay tax ) so that it doesn't create a cashflow problem?
Will the profit split be allocated against both loan accounts and the monthly Salary taken by the 60% member be posted against his loan account?
Apologies for all the questions but would appreciate any feedback or advice given as I am getting my knickers in a knot! Our accountant does our books privately after hours and therefore responses from her are slow and the end of the financial year is looming!!
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