Entrepreneurship & Small Business

Is a partner not paid in cash but in equity considered a full-time employee?

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  • Oct 31st, 2018 10:27 pm
[OP]
Deal Addict
Jul 5, 2006
1071 posts
37 upvotes
Toronto

Is a partner not paid in cash but in equity considered a full-time employee?

i.e. no salary no commission but vested shares and working full-time.
4 replies
Deal Fanatic
User avatar
Mar 23, 2008
7321 posts
4229 upvotes
Edmonton
Maybe you need to describe what it is you're trying to define and why. A partner often isn't an "employee" of any type. They can be silent partners who just deal with the money (in or out of the company). They can be working partners who may or may not take money (or shares) out of the company in compensation.

C
[OP]
Deal Addict
Jul 5, 2006
1071 posts
37 upvotes
Toronto
CNeufeld wrote: Maybe you need to describe what it is you're trying to define and why. A partner often isn't an "employee" of any type. They can be silent partners who just deal with the money (in or out of the company). They can be working partners who may or may not take money (or shares) out of the company in compensation.

C
A full time working partner. I am filing some government tech-grants and I’m asked for # of employees.
[OP]
Deal Addict
Jul 5, 2006
1071 posts
37 upvotes
Toronto
Forgot to mention - this is a C-corp.
Deal Addict
Sep 23, 2007
4433 posts
780 upvotes
I read through the employment standards act before. There seems to be no actual legal definition of "full time" to my understanding. The CRA doesn't care either because they go by gross pay. If you work 30 hours this month and 20 next month. Are you full time? There are all kinds of these little situations that make it tricky to define someone as full time or part time. What usually matters the the number of hours worked. Like if you ever need to settle something in court, the courts will probably go by your record of hours worked to calculate compensation, rather than any arbitrary definitions of full or part time.

I think the only concrete measure you can have to respond to a question about # of employees is the number of staff on payroll in the current pay period. So by this definition, if the corporation pays the partner salaries, then yes.

For the purpose of a grant, it's probably an advantage to have a higher # because it signals that you are creating jobs. But then again I have not completed that particular grant request. I have completed some government surveys that actually defined what they mean by "full time" and depending on the agency asking, the definition differs. So basically if your grant doesn't specify, you are free to put whatever your own interpretation is. If challenged, I think it's quite easy to justify. If it mattered a lot, usually they would have defined it more narrowly. Given that you are asking this question it means the questionnaire did not define it for you.

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