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Division Agreement for Philippines

Division Agreement Template for Philippines

A Division Agreement under Philippine law is a comprehensive legal document that governs the process of dividing a company's assets, liabilities, operations, and obligations between two or more resulting entities. This agreement, governed by the Revised Corporation Code of the Philippines and related legislation, outlines the terms and conditions of the corporate division, including asset allocation, liability distribution, employee matters, and regulatory compliance requirements. It serves as the primary document for implementing corporate restructuring through division, ensuring compliance with Philippine corporate law while protecting the interests of all stakeholders involved.

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What is a Division Agreement?

A Division Agreement is a crucial legal instrument used in Philippine corporate restructuring scenarios where a company seeks to divide its operations, assets, and liabilities into two or more separate entities. This document becomes necessary during corporate reorganizations, family business successions, or strategic business separations. The agreement must comply with the Revised Corporation Code of the Philippines, relevant SEC regulations, and other applicable laws. It typically includes detailed provisions for asset and liability allocation, employee transfers, tax implications, and regulatory compliance. The Division Agreement serves as the master document that outlines all aspects of the division process, from initial planning to final execution, and must be carefully drafted to ensure all legal requirements are met and stakeholder interests are protected. This type of agreement is particularly important in the Philippine context, where family-owned businesses often undergo restructuring for succession planning or strategic purposes.

What sections should be included in a Division Agreement?

1. Parties: Identification of all parties involved in the division agreement, including their legal status and registered addresses

2. Background: Context of the division, including the current structure and reason for division

3. Definitions: Definitions of key terms used throughout the agreement

4. Purpose and Scope: Clear statement of the division's purpose and what assets, liabilities, and operations are covered

5. Division Structure: Detailed explanation of how the division will be implemented, including the resulting structure

6. Asset Allocation: Specification of how assets will be divided between parties

7. Liability Distribution: Assignment of existing liabilities and responsibilities

8. Financial Arrangements: Financial terms, including any payments, adjustments, or financial obligations

9. Tax Provisions: Treatment of tax liabilities and obligations arising from the division

10. Completion Mechanics: Process and requirements for completing the division

11. Representations and Warranties: Standard and specific warranties from all parties

12. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction details

13. Dispute Resolution: Procedures for handling disputes

14. Execution and Effectiveness: Signing requirements and effective date of the agreement

What sections are optional to include in a Division Agreement?

1. Employee Matters: Required when employees are affected by the division, covering transfer of employment, benefits, and related obligations

2. Intellectual Property Rights: Include when IP assets need to be divided or licensed between parties

3. Real Property Provisions: Required when real estate assets are involved in the division

4. Transitional Services: Include when ongoing support services are needed between divided entities

5. Environmental Matters: Required when environmental liabilities or compliance obligations need to be addressed

6. Government Approvals: Include when specific regulatory approvals are required for the division

7. Non-Competition: Include when restrictions on future competition between divided entities are necessary

8. Data Protection: Required when personal data or sensitive information is being transferred

What schedules should be included in a Division Agreement?

1. Schedule 1 - Asset Register: Detailed listing of all assets being divided

2. Schedule 2 - Liability Register: Comprehensive list of all liabilities being allocated

3. Schedule 3 - Employee Information: List of affected employees and their terms of employment

4. Schedule 4 - Real Property Details: Details of real estate assets including titles and encumbrances

5. Schedule 5 - Intellectual Property Register: List of IP rights and their allocation

6. Schedule 6 - Contracts Register: List of contracts being transferred or divided

7. Schedule 7 - Completion Requirements: Detailed checklist of actions required for completion

8. Appendix A - Form of Transfer Instruments: Template documents for transferring specific assets

9. Appendix B - Corporate Resolutions: Required corporate authorizations and resolutions

10. Appendix C - Transitional Services Agreement: Detailed terms of any transitional services arrangements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions


















































Clauses







































Relevant Industries

Manufacturing

Real Estate

Financial Services

Technology

Retail

Healthcare

Energy

Transportation

Telecommunications

Construction

Agriculture

Mining

Education

Professional Services

Relevant Teams

Legal

Finance

Corporate Strategy

Risk Management

Compliance

Human Resources

Operations

Tax

Corporate Planning

Business Development

Asset Management

Corporate Communications

Investor Relations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Corporate Secretary

General Counsel

Finance Director

Corporate Restructuring Officer

Business Development Manager

Risk Management Officer

Compliance Officer

Human Resources Director

Operations Director

Asset Manager

Tax Manager

Corporate Planning Manager

Board Member

Managing Director

Company President

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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