Question regarding business plans for an iphone app

Hi everyone, please forgive me for possibly posting this in the wrong area.
I have a couple of questions I'd like to have clarified regarding the service agreements for development of iphone apps.
I need to approach management at work, with an explanation/answer of how the royalty process works in regards to providing a free application to access a service we charge for.
If we develop an app, put it on the iphone store for free, but the users need to pay a monthly subscription service to fully use the program (via our website which uses paypay), does Apple take, or want a cut in the tiny profits, from having the program hosted for free in the app store?
This is the current scenario:
Clients sign up for a 'lite' type of usage of the site/service. If they want more features, they then use PayPal to update their subscription.
I guess two questions now... Firstly, can you use PayPal for monthly subscriptions in Apps?
Secondly, Would Apple want, or be authorised to take a cut on a free app, that is assisting in income for a company.
Are there 3rd party or custom agreements made? What if the app was charged for in the first place? Would that cover everything, and the rest of the income 'our business only'?
I hope this isn't too complicated or confusing, but I would like to be pointed in the direction of some good documentation with values and figures to back up the answer.
Thanks.
Steve

Hi Allan,
I tried called them. The girl I spoke to was hard to understand, and I'm not sure if she understood me correctly anyway.
She basically said "no" about Apple wanting a cut, however I will wait and see other's thoughts on here.
Steve

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