With respect to profit sharing, what might override equal sharing in a general partnership?

In the context of a general partnership, profit sharing is typically assumed to be equal among partners unless there is a specific agreement that dictates otherwise. A mutual agreement specifying a different arrangement is a fundamental aspect of partnership law that allows partners the flexibility to decide how profits and losses are to be shared.

This mutual agreement can take various forms, such as a partnership agreement that outlines each partner's rights and obligations regarding profit distribution. If the partners collectively agree to deviate from the default rule of equal profit sharing, this agreement becomes binding and governs the distribution of profits.

In contrast, a partner's investment in the business, while important for understanding the overall contribution and stake of each partner, does not directly dictate profit distribution unless explicitly referenced in a partnership agreement. Management decisions made by an active partner may influence the operations of the partnership but do not determine profit-sharing rights unless they are connected to the agreement. Finally, state partnership laws may set default rules or principles regarding partnerships, but again, these can be overridden by the specific agreements made by the partners.

Thus, when partners agree to share profits in a manner other than equally, that mutual agreement takes precedence and is essential for defining how profits will actually be distributed within the partnership.