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Profit Split Agreement Template for Malaysia

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Key Requirements PROMPT example:

Profit Split Agreement

"I need a Profit Split Agreement for a tech startup partnership between a software developer and a business investor, with a 60-40 profit split ratio, including specific provisions for intellectual property rights and quarterly profit distributions starting from March 2025."

Document background
The Profit Split Agreement is essential for businesses operating in Malaysia who wish to formalize their profit-sharing arrangements while ensuring compliance with local laws and regulations. This document is particularly relevant when two or more parties collaborate in a business venture and need to clearly define how profits will be calculated, distributed, and managed. It is commonly used in joint ventures, partnerships, and collaborative business arrangements where parties contribute different resources or capabilities to a common business objective. The agreement must comply with Malaysian contract law, tax regulations, and relevant industry-specific requirements. It typically includes detailed provisions for profit calculation methodologies, distribution schedules, financial reporting requirements, and dispute resolution mechanisms, all within the Malaysian legal framework.
Suggested Sections

1. Parties: Identifies and provides full details of all parties entering into the profit split agreement

2. Background: Explains the context of the agreement and the business relationship between the parties

3. Definitions: Defines key terms used throughout the agreement, including 'Profit', 'Revenue', 'Expenses', and other relevant terms

4. Scope of Agreement: Outlines the business activities covered by the profit split arrangement

5. Profit Calculation: Details the methodology for calculating profits, including revenue recognition and allowable expenses

6. Profit Distribution: Specifies the agreed-upon profit split ratios and timing of distributions

7. Payment Terms: Sets out the mechanics of how and when profit distributions will be made

8. Record Keeping and Audit Rights: Establishes requirements for financial record maintenance and rights to audit

9. Confidentiality: Protects sensitive business information shared between parties

10. Term and Termination: Specifies the duration of the agreement and conditions for termination

11. Dispute Resolution: Outlines the process for resolving disagreements between parties

12. Governing Law: Specifies that Malaysian law governs the agreement

Optional Sections

1. Non-Competition: Restricts parties from competing with the joint business - include when parties operate in the same industry

2. Intellectual Property Rights: Addresses ownership and usage of IP in the joint business - include when IP is significant to the business

3. Insurance Requirements: Specifies required insurance coverage - include for high-risk business activities

4. Force Majeure: Addresses unforeseen circumstances affecting profit generation - include for longer-term agreements

5. Assignment Rights: Controls ability to transfer rights under the agreement - include when transfer restrictions are important

6. Marketing and Branding: Establishes guidelines for marketing activities - include when joint branding is involved

7. Minimum Performance Requirements: Sets performance thresholds - include when specific performance levels are critical

8. Exit Strategy: Details procedures for party withdrawal - include for complex or long-term arrangements

Suggested Schedules

1. Schedule 1 - Profit Calculation Methodology: Detailed formula and examples of how profits will be calculated

2. Schedule 2 - Excluded Expenses: List of expenses that will not be considered in profit calculations

3. Schedule 3 - Distribution Schedule: Timeline and mechanics for regular profit distributions

4. Schedule 4 - Reporting Template: Standard format for financial reporting between parties

5. Schedule 5 - Initial Business Plan: Projections and business strategy (if applicable)

6. Appendix A - Bank Account Details: Designated accounts for profit distributions

7. Appendix B - Authorized Representatives: List of persons authorized to act on behalf of each party

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




































Clauses



































Relevant Industries

Technology and Software

E-commerce

Manufacturing

Professional Services

Real Estate

Retail and Distribution

Food and Beverage

Entertainment and Media

Construction

Healthcare Services

Agricultural Business

Financial Services

Tourism and Hospitality

Relevant Teams

Legal

Finance

Business Development

Operations

Commercial

Risk Management

Compliance

Corporate Strategy

Tax

Accounting

Partnership Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Business Development Manager

Finance Director

Legal Counsel

Managing Director

Partnership Manager

Operations Director

Business Owner

Investment Manager

Project Manager

Franchise Manager

Joint Venture Coordinator

Commercial Director

Risk Manager

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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