I didn't realize profit distributions could differ from ownership shares

Depends on your entity type. If you're an LLC taxed as a partnership, distributions don't have to follow ownership percentages as long as the partnership agreement allows it. But without language in the agreement, he can't just decide unilaterally.

This is why I keep everything in writing. Even a simple email trail helps.

I went through this with my brother-in-law. Our agreement said distributions were at the discretion of the managing member, which was him. I had no say. Cost me a lot to buy him out. Read your agreement carefully, even the parts you think don't matter.

What copperkettle said. But also consider tax implications. If he takes more cash but your capital accounts aren't adjusted properly, you could end up with a tax bill on income you didn't receive. That's the real trap.

Are you sure the operating agreement is silent? Sometimes there's a clause about "distributions in proportion to capital accounts" or something similar. That's different from ownership shares.

He can't just declare it. You both have to agree to amend the agreement or at least consent to a special distribution. If he does it anyway, you have a claim for breach of fiduciary duty. But lawyers are expensive, so try to negotiate first.

The biggest client argument is a red flag. Compensation for bringing in business should be a salary or bonus, not a distribution. Mixing the two is how partnerships fall apart.

Also, if you're a partnership, you need to think about guaranteed payyments. That's the proper way to pay a partner for services, and it's deductible to the partnership. Distributions are just a return of capital.

I checked the agreement again. It says "distributions shall be made at such times and in such amounts as the members may unanimously agree." So he can't do it without my consent. But the tax point about capital accounts worries me. I'll bring that up with our accountant before we discuss it again.