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Profit Split Agreement
"I need a Profit Split Agreement for a joint venture between my tech company and a software development firm in Sydney, with a 60-40 profit split ratio, quarterly distributions starting from March 2025, and specific provisions for intellectual property ownership."
1. Parties: Identifies and provides full details of all parties to the agreement
2. Background: Explains the context and purpose of the agreement, including the business relationship between the parties
3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules
4. Term and Commencement: Specifies when the agreement starts and its duration
5. Profit Definition: Clearly defines what constitutes profit for the purposes of the agreement
6. Calculation of Profit: Details the methodology for calculating distributable profit
7. Profit Split Ratio: Specifies the agreed split of profits between parties
8. Payment Terms: Sets out timing and method of profit distribution
9. Accounting and Records: Specifies accounting standards, record-keeping requirements, and audit rights
10. Parties' Obligations: Details the responsibilities and obligations of each party
11. Confidentiality: Protects confidential information shared between parties
12. Dispute Resolution: Establishes procedures for resolving disagreements
13. Termination: Specifies circumstances and procedures for ending the agreement
14. General Provisions: Includes standard boilerplate clauses like notices, governing law, and assignment
1. Non-Competition: Restricts parties from competing activities - include when parties may have competing interests
2. Intellectual Property: Addresses IP ownership and usage - include when IP is relevant to the profit-generating activities
3. Force Majeure: Covers unforeseeable circumstances - include when long-term or high-value arrangement
4. Tax Arrangements: Detailed tax handling procedures - include when complex tax implications exist
5. Working Capital: Defines working capital requirements - include when ongoing business operations need funding
6. Management Rights: Specifies management and control rights - include when parties have operational involvement
7. Exit Mechanisms: Details procedures for party exit - include when long-term or complex arrangement
1. Calculation Methodology: Detailed formulas and examples of profit calculations
2. Accounting Principles: Specific accounting standards and procedures to be followed
3. Excluded Costs: List of costs specifically excluded from profit calculations
4. Distribution Timeline: Detailed schedule of profit distribution dates and procedures
5. Reporting Template: Standard format for regular profit reporting
6. Initial Capital Contributions: Details of any initial investments or contributions by parties
7. Authorized Representatives: List of authorized persons for various decisions and their powers
Authors
Technology
Professional Services
Real Estate
Mining and Resources
Manufacturing
Retail
Entertainment
Healthcare
Financial Services
Construction
Agriculture
Media and Communications
Legal
Finance
Accounting
Tax
Corporate Development
Business Development
Operations
Commercial
Compliance
Risk Management
Chief Executive Officer
Chief Financial Officer
Finance Director
Commercial Director
Business Development Manager
Partnership Manager
Legal Counsel
Corporate Lawyer
Tax Manager
Accounting Manager
Operations Director
Investment Manager
Joint Venture Manager
Managing Partner
Project Director
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