Legal Question in Business Law in Arizona

Sweat Equity in Business Partnership

When one person is earning their value in the business through sweat equity what are the advantages of tracking it in the accounting system? Does the partner earning the sweat equity still have share in the business if this information is omitted from the accounting system? And how does one prove they worked the sweat equity if it is not recognized in the accounting system?


Asked on 3/29/07, 12:05 pm

1 Answer from Attorneys
Gerd Zimmermann zimmermann nielsen & colleagues

Re: Sweat Equity in Business Partnership

first of all this is tax evation, second it does not change the partners but it can be fraud. Somewhere the payments come in, that is what you must find

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Answered on 3/29/07, 12:31 pm


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