Putting Money into a Partnership: Some Tricky Questions

The short answer to your question is "no." Once you've set the percentage ownership for a partnership, the only ways to change it is for the partners to make disproportionate contributions to capital, or for the partners to buy and sell pieces of their ownership to one another. Either way, it's a cumbersome process, and there's no guarantee the partners will see "eye to eye" about the amount by which each partner's share will be increased or decreased, the purchase price for each percent of the company changing hands and so forth.

A better way to do this would be to set your ownership percentages equally, but then decide on a project-by-project basis how much each partner can take out as a "guaranteed payment" (similar to the compensation an employee would receive) for his or her services on each project before the remaining profits are equally split among the partners. That way, you can all agree to accept lower "guaranteed payments" when times are bad, higher "guaranteed payments" when times are good or simply assign different "guaranteed payments" for each project (giving a higher payout to the partner who brought in the business, for example) without changing your equal ownership of the business or your voting rights.

Even then, however, it's going to be tough to get agreement on the "guaranteed payments." A four-way partnership with equal ownership is a very unstable structure. Three out of four partners will have to agree in order for the company to do anything, and it is likely to be a "shifting" majority (for example, A, B and C agreeing to do the first project; B, C and D agreeing on the next project; and so forth). If two of you decide to go one way, and the other two another, the company will be "deadlocked" and you may have to dissolve the business.

To avoid that, you can have one partner -- a different one each calendar year, perhaps in alphabetical order -- act as a "tie breaker" with the power to cast an additional vote if the partners are split 50/50. Just make sure he or she carries lots of insurance...