What is the ratio of profit sharing for pre-and post incorporation of company?

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2026-05-21 12:30

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The profit-sharing ratio for a company typically differs before and after incorporation. Pre-incorporation, profits are usually shared among the founders or partners based on their agreement, which may not be formalized. Post-incorporation, profit-sharing is determined by the ownership of shares, with profits distributed as dividends based on the number of shares held. This formal structure helps ensure clarity and adherence to legal requirements.

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