Profit-Sharing Agreement Template

How to Write a Profit-Sharing Agreement?

Writing the agreement is a straightforward process, during which the parties are supposed to describe the profit-sharing process and regulate its key parts. A Profit-Sharing Agreement template should contain several sections, which can include the following:

1. Introduction. The document should start with a title, it will help to express the nature of the document. After that, the involved parties should designate their names and locations, including the zip code, state, county, street name, and building number.
2. Nature of the Relationship. In this part of the document, the parties should state the reason for dividing the profit. For example, if it is a joint venture Profit-Sharing Agreement, then the parties should designate the requisites of a Joint Venture Agreement. If the profit-sharing is taking place between the members of the partnership, then the parties should designate information about their partnership.
3. The Subject. Here the parties should describe the process of sharing the profits. It should contain information about how it will be divided, how often it will happen, and what is included in it. For example, parties can state that the profit will be shared in accordance with how much they have invested in the company (their partnership shares).
4. Parties' Rights and Responsibilities. Parties use this section to designate their primary rights and responsibilities, which can depend on a lot of important aspects, such as the circumstances of the situation, the conditions the parties have agreed on, etc.
5. Governing Law. Here the parties enter the state law in accordance with which the agreement will be construed and governed.
6. Contact Information. For notification purposes, the parties should enter their contact information, such as a postal address, telephone number, and email. This information will be used for all official notifications, letters on the subject of this agreement, etc.
7. Signatures. To express their consent with the contents of this document and state that the parties are entering the agreement fully lucid and under their own free will, they should sign the contract and date it.

The parties can negotiate and include other parts in the agreement, such as severability, representatives, jurisdiction, a non-disclosure clause, contract termination, etc.

Related Topics and Templates:

• Partnership Dissolution Agreement;
• Notice of Withdrawal from Partnership;
• Joint Venture Agreement.