[{"data":1,"prerenderedAt":512},["ShallowReactive",2],{"document-profit-sharing-agreement-D13753":3},{"document":4,"label":23,"preview":11,"thumb":24,"description":5,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":25,"breadcrumb":29,"related":35,"customDescModule":177,"customdescription":6,"mdFm":178,"mdProseHtml":511},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"PROFIT-SHARING AGREEMENT This Profit-Sharing Agreement (\"Agreement\") is entered into effect as of [DATE], BETWEEN: [COMPANY NAME], (\"Company\"), an individual with their main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [EMPLOYEE/PARTNER NAMES], (\"Participants\") an individual with their main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] PURPOSE OF THE AGREEMENT The Parties agree to establish the terms and conditions for the sharing of profits generated by the Company among the Participants based on their respective contributions and interests. DEFINITIONS 2.1 Profits: Net profits generated by the Company, calculated according to generally accepted accounting principles (GAAP). 2.2 Participant: An individual or entity that is a Party to this Agreement and entitled to a share of the profits. PROFIT SHARING PLAN 3.1 The Company shall establish a Profit-sharing Plan, the details of which are outlined in Exhibit A attached hereto. 3.2 The Profit-sharing Plan shall specify the distribution of profits among the Participants, including any criteria, percentages, or formulas used to determine each Participant's share. 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Partners have considered various forms of joint business enterprises for their business activities. Partners desire to enter into a partnership agreement as the most advantageous business form for their mutual purposes. The parties hereto agree to form a limited partnership (the \"Partnership\") under [LAW, CODE OR ACT]. In consideration of the mutual promises contained in this agreement, partners agree as follows: NAME AND DOMICILE The name of the partnership shall be [name]. The principal place of business shall be at [address], [city], [state/province], unless relocated by consent of the partners. Purposes Subject to the limitations set forth in this Agreement, the purposes of the Partnership are to engage in the business of [DESCRIBE ACTIVITIES]; and to conduct other activities as may be necessary or incidental to or desirable in connection with the foregoing. DURATION OF AGREEMENT The term of this agreement shall be for [number] years, commencing on [date], and terminating on [date], unless sooner terminated by mutual consent of the parties or by operation of the provisions of this agreement. CLASSIFICATION AND PERFORMANCE BY PARTNERS Partners shall be classified as active partners, advisory partners, or estate partners. An active partner may voluntarily become an advisory partner, may be required to become one irrespective of age, and shall automatically become one after attaining the age of [age] years, and in each case shall continue as such for [number] years unless the partner sooner withdraws or dies. If an active partner dies, the partner's estate will become an estate partner for [number] years. If an advisory partner dies within [Number] years of having become an advisory partner, the partner will become an estate partner for the balance of the [number]-year period. Only active partners shall have any vote in any partnership matter. At the time of the taking effect of this partnership agreement, all the partners shall be active partners except [name] and [name], who shall be advisory partners. An active partner, after attaining the age of [age] years, or prior to that age if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of all the other active partners determines that the reason for the change in status is bad health, may become an advisory partner at the end of any calendar month on giving [number] calendar months' prior notice in writing of the partner's intention to do so. The notice shall be deemed to be sufficient if sent by registered mail addressed to the partnership at its principal office at [address], [city], [state/province] not less than [number] calendar months prior to the date when the change is to become effective. Any active partner may at any age be required to become an advisory partner at any time if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of the other active partners shall decide that the change is for any reason in the best interests of the partnership, provided notice of the decision shall be given in writing to the partner. The notice shall be signed by the [chairman or as the case may be] of the [executive committee or as the case may be] or, in the event of his or her being unable to sign at the time, by another member of the [executive committee or as the case may be]. The notice shall be served personally on the partner required to change his or her status or mailed by registered mail to the partner's last known address. Change of the partner's status shall become effective as of the date specified in the notice. Every active partner shall automatically and without further act become an advisory partner at the end of the fiscal year in which the partner's birthday occurs. In the event that an active partner becomes an advisory partner or dies, the partner or the partner's estate shall be entitled to the following payments at the following times: [describe] Each active partner shall apply all of the partner's experience, training, and ability in discharging the partner's assigned functions in the partnership and in the performance of all work that may be necessary or advantageous to further the business interests of the partnership. CONTRIBUTION Each partner shall contribute [amount] on or before [date] to be used by the partnership to establish its capital position. Any additional contribution required of partners shall only be determined and established in accordance with Article Nineteen. MANAGEMENT OF THE PARTNERSHIP The Partnership shall be managed by [SPECIFY]. Subject to the limitations specifically contained in this Agreement, [PARTY MANAGING THE PARTNERSHIP] shall have the full, exclusive and absolute right, power and authority to manage and control the Partnership and the property, assets and business thereof. [PARTY MANAGING THE PARTNERSHIP] shall have all of the rights, powers and authority conferred by law or under other provisions of this Agreement. Without limiting the generality of the foregoing, such powers include the right on behalf of the Partnership, in [PARTY MANAGING THE PARTNERSHIP]' sole discretion, to: Acquire, purchase, renovate, improve, and own any property or assets necessary or appropriate or in the best interests of the business of the Partnership, and to acquire options for the purchase of any such property; Borrow money, issue evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any indebtedness or obligation of the Partnership, and secure such indebtedness by mortgage, deed of trust, pledge or other lien on Partnership assets; Sue on, defend or compromise any and all claims or liabilities in favor of or against the Partnership and to submit any or all such claims or liabilities to arbitration; File applications, communicate and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting, the Partnership's assets or any part thereof or any other aspect of the Partnership business; Retain services of any kind or nature in connection with the Partnership business, and to pay therefore such remuneration deem reasonable and proper; and Perform any and all other acts deem necessary or appropriate to the Partnership business. TRANSFER OF PARNERSHIP INTERESTS Restrictions on Transfer None of the Partners shall sell, assign, transfer, mortgage, encumber, or otherwise dispose of the whole or part of that Partner's interest in the Partnership, and no purchaser or other transferee shall have any rights in the Partnership as an assignee or otherwise with respect to all or any part of that Partnership interest attempted to be sold, assigned, transferred, mortgaged, encumbered, or otherwise disposed of, unless and to the extent that the remaining Partner(s) have given consent to such sale, assignment, transfer, mortgage, or encumbrance, but only if the transferee forthwith assumes and agrees to be bound by the provisions of this Agreement and to become a Partner for all purposes hereof, in which event, such transferee shall become a substituted partner under this Agreement.","Partnership Agreement","8","https://templates.business-in-a-box.com/imgs/1000px/partnership-agreement-D12551.png","https://templates.business-in-a-box.com/imgs/250px/12551.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12551.xml",{"title":92,"description":6},"partnership agreement",[94,96],{"label":18,"url":95},"business-legal-agreements",{"label":97,"url":98},"Partnership Agreements","partnership-agreement","/template/partnership-agreement-D12551",{"description":101,"descriptionCustom":6,"label":102,"pages":103,"size":104,"extension":10,"preview":105,"thumb":106,"svgFrame":107,"seoMetadata":108,"parents":109,"keywords":112,"url":113},"JOINT VENTURE AGREEMENT This Joint Venture Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"First Joint Venturer\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND JOINT VENTURER NAME] (the \"Second Joint Venturer\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] This Agreement is entered by First Joint Venturer and Second Joint Venturer, herein after collectively referred to as the \"Joint Venturers\", for the purpose of performing: [DESCRIBE JOINT VENTURE]. WITNESSETH: WHEREAS, the parties are desirous of forming a Joint Venture (the \"Venture\"), under the laws of the [State/Province] of [STATE/PROVINCE] by execution of this Agreement for the purposes set forth herein and are desirous of fixing and defining between themselves their respective responsibilities, interests, and liabilities in connection with the performance of the before mentioned project; and NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the Parties herein agree to constitute themselves as Joint Venturers, henceforth, \"Venturers\" for the purposes before mentioned, and intending to be legally bound hereby, the parties hereto, after first being duly sworn, do covenant, agree and certify as follows: DEFINITIONS \"Affiliate\" shall refer to (i) any person directly or indirectly controlling, controlled by or under common control with another person, (ii) any person owning or controlling 10% or more of the outstanding voting securities of such other person, (iii) any officer, director or other partner of such person and (iv) if such other person is an officer, director, joint Venturer or partner, any business or entity for which such person acts in any such capacity. \"Venturers\" shall refer to [VENTURE NAME] Inc., and any successor(s) as may be designated and admitted to the Venture. \"Internal Revenue Code\", \"Code\" or \"I.R.C.\" shall refer to the current and applicable Internal Revenue Code. \"Net Profits and Net Losses\" means the taxable income and loss of the Venture, except as follows: [DESCRIBE] The \"Book\" value of an asset shall be substituted for its adjusted tax basis if the two differ, but otherwise Net Profits and Net Losses shall be determined in accordance with federal income tax principles. \"Project\" shall refer to that certain [DESCRIBE] project known as [NAME]. \"Treasury Regulations\" shall refer to those regulations promulgated by the Department of the Treasury with respect to certain provision of Internal Revenue Code. \"Percentage of Participation\" shall refer to that figure set forth in Exhibit A. FORMATION, NAME, AND PRINCIPLE PLACE OF BUSINESS Formation (a) The Venturers do hereby form a joint venture pursuant to the laws of the State of [STATE/PROVINCE] in order for the Venture to carry on the purposes for which provision is made herein. (b) The Ventures shall execute such certificates as may be required by the laws of the [State/Province] of [STATE/PROVINCE] or of any other state in order for the Venture to operate its business and shall do all other acts and things requisite for the continuation of the Venture as a joint venture pursuant to applicable law. Name The Name and style under which the Venture shall be conducted is: [DESCRIBE]. Principal place of business The Venture shall maintain its principal place of business at [FULL ADDRESS]. The Venture may re-locate its office from time to time or have additional offices as the Venturers may determine. PURPOSE OF THE JOINT VENTURE The business of the Venture shall be to perform: [DESCRIBE], a project having the Contract # , being entitled, and being in a dollar amount of [AMOUNT], in accordance with the contract documents for the Project and all such other business incidental to the general purposes herein set forth. TERM The term of the Venture shall commence as of the date hereof and shall be terminated and dissolved upon the earliest to occur of: (i) completion of the Project and receipt of all sums due the Venture by the Owner, [OWNER NAME] pursuant thereto and payment of all laborers and material men employed by the Venture in connection with the project; (ii) [DATE]; (iii) the unanimous agreement of the Ventures; or (iv) the order of a court of competent jurisdiction. PERCENTAGE OF PARTICIPATION Description Except as otherwise provided in sections 6.0 and 9.0 hereof, the interest of the Parties in any gross profits and their respective shares in any losses and/or liabilities that may result from the filing of a joint bid and/or the performance of the Construction Contract, and their interests in all property and equipment acquired and all money received in connection with the performance of the Contract shall be as follows: [Name Joint Venture Partner Percentage] Losses The Parties agree that in the event any losses arise out of or results from the performance of the Project, each Venturer shall assume and pay the share of the losses that is equal to the percentage of participation. Liabilities If for any reason, a Venturer sustains any liabilities or is required to pay any losses arising out of or directly connected with the Project, or the execution of any surety bonds or indemnity agreements in connection therewith, which are in excess of its Percentage of Participation, in the Joint Venture, the other Venturer shall promptly reimburse such Venturer this excess, so that each and every member of the Joint Venturer will then have paid its proportionate share of such losses to the full extent of its Percentage of Participation. Indemnities The Venturers agree to indemnify each other and to hold the other harmless from, any and all losses of the Joint Venture that are in excess of such other Venturer's Percentage of Participation. Provided that the provisions of this subsection shall be limited to losses that are directly connected with or arise out of the performance of the Project and/or the execution of any bonds or indemnity agreements in connection therewith and shall not be relate to or include any incidental, indirect or consequential losses that may be sustained or suffered by a Party. Duration The Parties shall from time to time execute such bonds and indemnity agreements, including applications there and other documents that may be necessary in connection with the performance of the Project. Provided however, that the liability of each of the Parties under any agreements to indemnify a surety company or surety companies shall be limited to the percentage of the total liability assumed by all the Parties under such indemnity agreements that is equal to the Party's Percentage of Participation. Initial contribution of the venture (a) The Venturers shall contribute the Property to the Venture and their Capital Account shall each be credited with the appropriate value of such contribution in accordance with their Venture interests. (b) Except as otherwise required by law or this Agreement, the Venturers shall not be required to make any further capital contributions to the Venture. Venture interests Upon execution of this Agreement, the Venturers shall each own the following interests in the Venture: Joint Venture Partner Percentage Return of capital contributions (a) No Venturer shall have the right to withdraw his capital contributions or demand or receive the return of his capital contributions or any part thereof, except as otherwise provided in this Agreement. (b) The Venturers shall not be personally liable for the return of capital contributions or any part thereof, except as otherwise provided in this Agreement. (c) The Venture shall not pay interest on capital contributions of any Venturer.","Joint Venture Agreement","7",70,"https://templates.business-in-a-box.com/imgs/1000px/joint-venture-agreement-D889.png","https://templates.business-in-a-box.com/imgs/250px/889.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#889.xml",{"title":6,"description":6},[110,111],{"label":18,"url":95},{"label":18,"url":95},"joint venture agreement","/template/joint-venture-agreement-D889",{"description":115,"descriptionCustom":6,"label":116,"pages":117,"size":9,"extension":10,"preview":118,"thumb":119,"svgFrame":120,"seoMetadata":121,"parents":123,"keywords":122,"url":128},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. 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The Members have formed the Company by causing a Certificate of Formation (the \"Certificate\") conforming to the requirements of the [STATE] Revised Limited Liability Company Act (the \"Act\") to be filed in the Office of the Secretary of State for the State of [STATE]. NAME, PURPOSE AND PRINCIPAL OFFICE OF COMPANY Name The name of the Company is [COMPANY NAME], LLC. The affairs of the Company shall be conducted under such name or such other name as the Managing Members may, in their discretion, determine. [COMPANY NAME] hereby grants the Company the right, at no cost, to use the [SPECIFY] name for the term of the Company as set forth in Article [SPECIFY] hereof. Agreement In consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members executing this Agreement hereby agree to the terms and conditions of this Agreement, as it may be amended from time to time. It is the express intention of the Members that this Agreement shall be the sole statement of agreement among them, and, except to the extent a provision of this Agreement expressly incorporates matters by express reference, this Agreement shall govern even when inconsistent with or different from the provisions of the Act or any other provision of law. Purpose; Powers Purpose. The primary purpose of the Company is to act as the general partner of [COMPANY NAME] (the \"Fund\"). Powers. Subject to all of the terms and provisions hereof, the Company shall have all powers necessary, suitable or convenient for the accomplishment of the purpose of the Company, including, without limitation, the following: to purchase, sell, invest and trade in securities of every kind, including, without limitation, capital stock, limited partnership interests, bonds, notes, debentures, securities convertible into other securities, trust receipts and other obligations, instruments or evidences of indebtedness, as well as in rights, warrants and options to purchase securities; to make and perform all contracts and engage in all activities and transactions necessary or advisable to [SPECIFY] out the purposes of the Company, including, without limitation, the purchase, sale, transfer, pledge and exercise of all rights, privileges and incidents of ownership or possession with respect to any Company asset or liability; the borrowing or lending of money and the securing of payment of any Company obligation by hypothecation or pledge of, or grant of a security interest in, Company assets; and the guarantee of or becoming surety for the debts of others; and otherwise to have all the powers available to it as a limited liability company under the Act. Registered Office and Agent The initial address of the Company registered office in [STATE] is, and its initial agent at such address for service of process is Incorporating Services Limited. The Managing Members may change the registered office and agent for service of process as they from time to time may determine. Principal Office The principal office of the Company shall initially be located at [ADDRESS]. The Managing Members may change the location of the principal office of the Company at any time. Definitions Additional Members. This term shall have the meaning ascribed to it in Paragraph 3.2. Affiliate. With reference to any person, any other person controlling, controlled by or under direct or indirect common control with such person. Agreement. This Operating Agreement of [COMPANY NAME], a [STATE] limited liability company. Assignee. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Bankruptcy. A person or entity shall be deemed bankrupt if: any proceeding is commenced against such person or entity as debtor for any relief under bankruptcy or insolvency laws, or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions and such proceeding is not dismissed within [NUMBER] days after such proceeding has commenced, or such person or entity commences any proceeding for relief under bankruptcy or insolvency laws or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions. Book Value. This term shall have the meaning ascribed to it in Paragraph 6.2(a). Capital Account. This term shall have the meaning ascribed to it in Paragraph 6.2(b). Capital Commitment. This term shall have the meaning ascribed to it in Paragraph 5.1. Capital Contribution. This term shall have the meaning ascribed to it in Paragraph 5.1(b). [SPECIFY]. The Company [PERCENTAGE] carried interest in the income of the Fund. Certificate. The Certificate of Formation of [COMPANY NAME], a [STATE] limited liability company. Code. [SPECIFY YOUR COUNTRY INTERNAL REVENUE ACT/CODE/LAW], as amended from time to time (and any corresponding provisions of succeeding law). Defaulting Member. This term shall have the meaning ascribed to it in Paragraph 5.4(a). Fiscal Quarter. This term shall have the meaning ascribed to it in Paragraph 6.2(c). Fiscal Year. This term shall have the meaning ascribed to it in Paragraph 6.2(d). Management Fee. The management fee receivable by the Company from the Fund. Net Income or Net Loss. This term shall have the meaning ascribed to it in Paragraph 6.2(e). Percentage Interest. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Sale or Exchange. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Securities Act. [YOUR COUNTRY ACT/CODE/LAW] as amended from time to time. Securities. Securities of every kind and nature and rights and options with respect thereto, including stock, notes, bonds, debentures, evidences of indebtedness and other business interests of every type, including interests in partnerships, joint ventures, proprietorships and other business entities. TMP. This term shall have the meaning ascribed to it in Paragraph 13.16. Termination Date. This term shall have the meaning ascribed to it in Paragraph 2.1. Treasury Regulations. The Income Regulations promulgated under the Code, as such Regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). TERM AND TERMINATION OF THE COMPANY Term The term of the Company shall continue until [NUMBER] year after the dissolution of the Fund unless sooner terminated as provided in Paragraph 2.2 or by operation of law or extended as provided in Paragraph 2.3. The last day of the term of the Company, as such may be extended as provided herein, is referred to herein as the \"Termination Date.\" Termination The Company shall terminate prior to the end of the period specified in Paragraph 2.1 at the election of the Managing Members. The Managing Members shall deliver notice of such termination to the Non-Managing Members. Extension of Term The term of the Company may be extended by the Managing Members. The Managing Members shall provide notice of any such extension to the Non-Managing Members. INITIAL MEMBERS; CHANGES IN MEMBERSHIP Name and Address The persons listed on Exhibit A are hereby admitted as Members of the Company","LLC Operating Agreement","21",207,"https://templates.business-in-a-box.com/imgs/1000px/llc-operating-agreement-D5209.png","https://templates.business-in-a-box.com/imgs/250px/5209.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#5209.xml",{"title":6,"description":6},[139,140],{"label":18,"url":95},{"label":126,"url":127},"llc operating agreement","/template/llc-operating-agreement-D5209",{"description":144,"descriptionCustom":6,"label":145,"pages":146,"size":147,"extension":10,"preview":148,"thumb":149,"svgFrame":150,"seoMetadata":151,"parents":152,"keywords":160,"url":161},"EMPLOYMENT AGREEMENT FOR AN EXECUTIVE This Employment Agreement for an Executive (the \"Agreement\") is made and effective this [Date], BETWEEN: [EXECUTIVE NAME] (the \"Executive\"), an individual with his main address at: AND: [COMPANY NAME] (the \"Company\"), an entity organized and existing under the laws of the [STATE/PROVINCE], with its head office located at: Recitals In consideration of the covenants and agreements herein contained and the moneys to be paid hereunder, the Company hereby employs the Executive and the Executive hereby agrees to perform services as an Executive of the Company, upon the following terms and conditions: TERM The Company hereby employs Executive to serve as [position] and to serve in such additional or different position or positions as the Company may determine in its sole discretion. The term of employment shall be for a period of [NUMBER] years (\"Employment Period\") to commence on [DATE], unless earlier terminated as set forth herein. The effective date of this Agreement shall be the date first set forth above, and it shall continue in effect until the earlier of: The effective date of any subsequent employment agreement between the Company and the Executive; The effective date of any termination of employment as provided elsewhere herein; or [NUMBER] year(s) from the effective date hereof, provided, that this Employment Agreement shall automatically renew for successive periods of [NUMBER] years each unless either party gives written notice to other that it does not wish to automatically renew this Agreement, which written notice must be received by the other party no less than [NUMBER] days and no more than [NUMBER] days prior to the expiration of the applicable term. Duties and Responsibilities Executive will be reporting to [IDENTIFY]. Within the limitations established by the By-laws of the Company, the Executive shall have each and all of the duties and responsibilities of that position and such other or different duties on behalf of the Company, as may be assigned from time to time by [identify what person or body may assign additional responsibilities]. Location The initial principal location at which Executive shall perform services for the Company shall be [location]. Acceptance of Employment Executive accepts employment with the Company upon the terms set forth above and agrees to devote all Executive's time, energy and ability to the interests of the Company, and to perform Executive's duties in an efficient, trustworthy and business-like manner. Devotion of Time to Employment The Executive shall devote the Executive's best efforts and substantially all of the Executive's working time to performing the duties on behalf of the Company. The Executive shall provide services during the normal business hours of the Company as determined by the Company. Reasonable amounts of time may be allotted to personal or outside business, charitable and professional activities and shall not constitute a violation of this Agreement provided such activities do not materially interfere with the services required to be rendered hereunder. QUALIFICATIONS The Executive shall, as a condition of this Agreement, satisfy all of the qualification that are reasonably and in good faith established by the Board of Directors. Compensation Base Salary Executive shall be paid a base salary (\"Base Salary\") at the annual rate of [salary], payable in bi-weekly installments consistent with Company's payroll practices. The annual Base Salary shall be reviewed on or before [DATE] of each year, unless Executive's employment hereunder shall have been terminated earlier pursuant to this Agreement, starting on [agreed upon date] by the Board of Directors of the Company to determine if such Base Salary should be increased for the following year in recognition of services to the Company. In consideration of the services under this Agreement, Executive shall be paid the aggregate of basic compensation, bonus and benefits as hereinafter set forth. Payment Payment of all compensation to Executive hereunder shall be made in accordance with the relevant Company policies in effect from time to time, including normal payroll practices. Bonus From time to time, the Company may pay to Executive a bonus out of net revenues of the Company. Payment of any bonus compensation shall be at the sole discretion of the Board of Directors or the Executive committee of the Board of Directors and the Executive shall have no entitlement to such amount absent a decision by the Company as aforesaid to make such bonus compensation. Executive shall also be entitled to a bonus determined as follows: [DESCRIBE] Benefits The Company shall provide Executive with such benefits as are provided to other senior management Of the Company. Benefits shall include at a minimum (i) paid vacation of [NUMBER] days per year, at such times as approved by the Board of Directors, (ii) health insurance coverage under the same terms as offered to other Executives of the Company, (iii) retirement and profit sharing programs as offered to other Executives of the Company, (iv) paid holidays as per the Company's policies, and (v) such other benefits and perquisites as are approved by the Board of Directors. The Company has the right to modify conditions of participation, terminate any benefit, or change insurance plans and other providers of such benefits in its sole discretion. The Executive shall be reimbursed for out of pocket expenses that are pre-approved by the Company, subject to the Company's policies and procedures therefore, and only for such items that are a necessary and integral part of the Executive's job functions. NonDeductible Compensation In the event a deduction shall be disallowed by the Internal Revenue Service or a court of competent jurisdiction for federal income tax purposes for all or any part of the payment made to Executive by the Company or any other shareholder or Executive of the Company, shall be required by the Internal Revenue Service to pay a deficiency on account of such disallowance, then Executive shall repay to the Company or such other individual required to make such payment, an amount equal to the tax imposed on the disallowed portion of such payment, plus any and all interest and penalties paid with respect thereto. The Company or other party required to make payment shall not be required to defend any proposed disallowance or other action by the Internal Revenue Service or any other state, federal, or local taxing authorities. Withholding All sums payable to Executive under this Agreement will be reduced by all federal, state, local, and other withholdings and similar taxes and payments required by applicable law. Other Employment Benefits Business Expenses Upon submission of itemized expense statements in the manner specified by the Company, Executive shall be entitled to reimbursement for reasonable travel and other reasonable business expenses duly incurred by Executive in the performance of his duties under this Agreement. Benefit Plans Executive shall be entitled to participate in the Company's medical and dental plans, life and disability insurance plans and retirement plans pursuant to their terms and conditions. Executive shall be entitled to participate in any other benefit plan offered by the Company to its Executives during the term of this Agreement (other than stock option or stock incentive plans, which are governed by Section 3(d) below). Nothing in this Agreement shall preclude the Company or any affiliate of the Company from terminating or amending any Executive benefit plan or program from time to time. Vacation Executive shall be entitled to [agreed upon number of time] weeks of vacation each year of full employment, exclusive of legal holidays, as long as the scheduling of Executive's vacation does not interfere with the Company's normal business operations.","Employment Agreement Executive","12",97,"https://templates.business-in-a-box.com/imgs/1000px/employment-agreement_executive-D543.png","https://templates.business-in-a-box.com/imgs/250px/543.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#543.xml",{"title":6,"description":6},[153,156,159],{"label":154,"url":155},"Human Resources","human-resources",{"label":157,"url":158},"Hire an Employee","hire-employee",{"label":18,"url":95},"employment agreement executive","/template/employment-agreement-executive-D543",{"description":163,"descriptionCustom":6,"label":164,"pages":165,"size":166,"extension":10,"preview":167,"thumb":168,"svgFrame":169,"seoMetadata":170,"parents":171,"keywords":175,"url":176},"INDEPENDENT CONTRACTOR AGREEMENT This Independent Contractor Agreement (\"Agreement\") is made and effective [Date], BETWEEN: [INDEPENDENT CONTRACTOR NAME] (the \"Independent Contractor\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] RECITALS Independent Contractor is engaged in providing [Describe] business services, its Employer Tax I.D. Number is [Insert], and its Business License Number is [insert]. Independent Contractor has complied with all Federal, State, and local laws regarding business permits, sales permits, licenses, reporting requirements, tax withholding requirements, and other legal requirements of any kind that may be required to carry out said business and the Scope of Work which is to be performed as an Independent Contractor pursuant to this Agreement. Independent Contractor is or remains open to conducting similar tasks or activities for clients other than the Company and holds themselves out to the public to be a separate business entity. Company desires to engage and contract for the services of the Independent Contractor to perform certain tasks as set forth below. Independent Contractor desires to enter into this Agreement and perform as an independent contractor for the company and is willing to do so on the terms and conditions set forth below. NOW, THEREFORE, in consideration of the above recitals and the mutual promises and conditions contained in this Agreement, the Parties agree as follows: TERMS This Agreement shall be effective commencing [Date], and shall continue until terminated at the completion of the Scope of Work which shall occur no later than [Date] or by either party as otherwise provided herein. STATUS OF INDEPENDENT CONTRACTOR This Agreement does not constitute a hiring by either party. It is the parties intentions that Independent Contractor shall have an independent contractor status and not be an employee for any purposes, including, but not limited to, [laws]. Independent Contractor shall retain sole and absolute discretion in the manner and means of carrying out their activities and responsibilities under this Agreement. This Agreement shall not be considered or construed to be a partnership or joint venture, and the Company shall not be liable for any obligations incurred by Independent Contractor unless specifically authorized in writing. Independent Contractor shall not act as an agent of the Company, ostensibly or otherwise, nor bind the Company in any manner, unless specifically authorized to do so in writing. TASKS, DUTIES, AND SCOPE OF WORK Independent Contractor agrees to devote as much time, attention, and energy as necessary to complete or achieve the following: [Describe]. The above to be referred to in this Agreement as the \"Scope of Work\". It is expected that the Scope of Work will completed by [Date]. Independent Contractor shall additionally perform any and all tasks and duties associated with the Scope of Work set forth above, including but not limited to, work being performed already or related change orders. Independent Contractor shall not be entitled to engage in any activities which are not expressly set forth by this Agreement. The books and records related to the Scope of Work set forth in this Agreement shall be maintained by the Independent Contractor at the Independent Contractor's principal place of business and open to inspection by Company during regular working hours. Documents to which Company will be entitled to inspect include, but are not limited to, any and all contract documents, change orders/purchase orders and work authorized by Independent Contractor or Company on existing or potential projects related to this Agreement. Independent Contractor shall be responsible to the management and directors of Company, but Independent Contractor will not be required to follow or establish a regular or daily work schedule. Supply all necessary equipment, materials and supplies. Independent Contractor will not rely on the equipment or offices of Company for completion of tasks and duties set forth pursuant to this Agreement. Any advice given Independent Contractors regarding the scope of work shall be considered a suggestion only, not an instruction. Company retains the right to inspect, stop, or alter the work of Independent Contractor to assure its conformity with this Agreement. ASSURANCE OF SERVICES Independent Contractor will assure that the following individuals (the \"Key Employees\") will be available to perform, and will perform, the Services hereunder until they are completed (identify by title and name as applicable): [Name of Key Employee, Title] [Name of Key Employee, Title] The Key Employees may be changed only with the prior written approval of the Company, which approval shall not be unreasonably withheld. COMPENSATION Independent Contractor shall be entitled to compensation for performing those tasks and duties related to the Scope of Work as follows: [Describe] Such compensation shall become due and payable to Independent Contractor in the following time, place, and manner: [Describe] NOTICE CONCERNING WITHHOLDING OF TAXES Independent Contractor recognizes and understands that it will receive a [specify tax] statement and related tax statements, and will be required to file corporate and/or individual tax returns and to pay taxes in accordance with all provisions of applicable Federal and State law. Independent Contractor hereby promises and agrees to indemnify the Company for any damages or expenses, including attorney's fees, and legal expenses, incurred by the Company as a result of independent contractor's failure to make such required payments. AGREEMENT TO WAIVE RIGHTS TO BENEFITS Independent Contractor hereby waives and foregoes the right to receive any benefits given by Company to its regular employees, including, but not limited to, health benefits, vacation and sick leave benefits, profit sharing plans, etc. This waiver is applicable to all non-salary benefits which might otherwise be found to accrue to the Independent Contractor by virtue of their services to Company, and is effective for the entire duration of Independent Contractor's agreement with Company. This waiver is effective independently of Independent Contractor's employment status as adjudged for taxation purposes or for any other purpose. Neither this Agreement, nor any duties or obligations under this Agreement may be assigned by either party without the consent of the other. TERMINATION This Agreement may be terminated prior to the completion or achievement of the Scope of Work by either party giving [number] days written notice. Such termination shall not prejudice any other remedy to which the terminating party may be entitled, either by law, in equity, or under this Agreement. NON-DISCLOSURE OF TRADE SECRETS, CUSTOMER LISTS AND OTHER PROPRIETARY INFORMATION Independent Contractor agrees not to disclose or communicate, in any manner, either during or after Independent Contractor's agreement with Company, information about Company, its operations, clientele, or any other information, that relate to the business of Company including, but not limited to, the names of its customers, its marketing strategies, operations, or any other information of any kind which would be deemed confidential, a trade secret, a customer list, or other form of proprietary information of Company. Independent Contractor acknowledges that the above information is material and confidential and that it affects the profitability of Company. ","Independent Contractor Agreement","6",62,"https://templates.business-in-a-box.com/imgs/1000px/independent-contractor-agreement-D160.png","https://templates.business-in-a-box.com/imgs/250px/160.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#160.xml",{"title":6,"description":6},[172],{"label":173,"url":174},"Consultant & Contractors","consulting-contractor-business","independent contractor agreement","/template/independent-contractor-agreement-D160",false,{"seo":179,"reviewer":190,"legal_disclaimer":194,"quick_facts":195,"at_a_glance":197,"personas":201,"variants":226,"glossary":250,"clauses":284,"how_to_fill":334,"common_mistakes":375,"faqs":400,"industries":428,"comparisons":445,"diy_vs_lawyer":458,"jurisdictions":471,"related_template_ids_curated":492,"schema":499,"classification":500},{"meta_title":180,"meta_description":181,"primary_keyword":182,"secondary_keywords":183},"Profit Sharing Agreement Template | BIB","Free profit sharing agreement template covering profit definition, calculation method, payment schedule, audit rights, and termination.","profit sharing agreement template",[15,184,185,186,187,188,189],"profit sharing agreement template word","profit sharing agreement free","employee profit sharing agreement","profit sharing contract template","business profit sharing agreement","profit sharing agreement pdf",{"name":191,"credential":192,"reviewed_date":193},"Bruno Goulet","CEO, Business in a Box","2026-05-02",true,{"difficulty":196,"legal_review_recommended":194,"signature_required":194,"notarization_required":177},"advanced",{"what_it_is":198,"when_you_need_it":199,"whats_inside":200},"A Profit Sharing Agreement is a legally binding contract between a business and one or more parties — employees, partners, investors, or affiliates — that grants the recipient a defined share of the company's profits under agreed conditions. This free Word download lets you set the profit definition, calculation method, payment schedule, audit rights, and termination provisions in a single enforceable document you can edit online and export as PDF.\n","Use it when you want to reward employees or partners with a stake in financial results without transferring equity, when structuring a revenue-share arrangement with an affiliate or joint-venture partner, or when formalizing an existing informal profit-split before it creates a dispute.\n","Definitions of \"profit\" and the calculation methodology, the recipient's percentage share and payment timeline, representations and audit rights, confidentiality obligations, term and termination conditions, and governing law. The template includes schedule placeholders for financial reporting and calculation worksheets.\n",[202,206,210,214,218,222],{"title":203,"use_case":204,"icon_asset_id":205},"Small business owners","Rewarding key employees with a profit share instead of equity or a salary raise","persona-small-business-owner",{"title":207,"use_case":208,"icon_asset_id":209},"Startup founders","Compensating early contributors through profits before a formal equity plan is in place","persona-startup-founder",{"title":211,"use_case":212,"icon_asset_id":213},"Partners in a professional practice","Documenting agreed profit-split ratios for a law firm, accounting firm, or medical practice","persona-professional-services",{"title":215,"use_case":216,"icon_asset_id":217},"Franchise operators","Sharing net profits with a manager or co-operator of a franchise location","persona-franchise-applicant",{"title":219,"use_case":220,"icon_asset_id":221},"Joint venture parties","Formalizing profit distribution between two businesses collaborating on a project","persona-operations-director",{"title":223,"use_case":224,"icon_asset_id":225},"Affiliate and referral partners","Structuring a percentage-of-profit fee arrangement with a marketing or sales partner","persona-agency",[227,231,234,237,240,243,247],{"situation":228,"recommended_template":229,"slug":230},"Sharing profits with full-time employees as a retention tool","Employee Profit Sharing Agreement","profit-sharing-agreement-D13753",{"situation":232,"recommended_template":102,"slug":233},"Splitting profits between two businesses in a joint venture","joint-venture-agreement-D889",{"situation":235,"recommended_template":86,"slug":236},"Compensating a partner who contributed capital but not labor","partnership-agreement-D12551",{"situation":238,"recommended_template":45,"slug":239},"Paying a revenue-based percentage to an affiliate or referral source","revenue-sharing-agreement-D13477",{"situation":241,"recommended_template":116,"slug":242},"Granting equity with profit rights to a co-founder","shareholders-agreement-D1016",{"situation":244,"recommended_template":245,"slug":246},"Rewarding a senior manager with a bonus tied to net income","Executive Employment Agreement","employment-agreement-executive-D543",{"situation":248,"recommended_template":131,"slug":249},"Distributing profits among members of an LLC","llc-operating-agreement-D5209",[251,254,257,260,263,266,269,272,275,278,281],{"term":252,"definition":253},"Net Profit","Total revenue minus all operating expenses, taxes, interest, and depreciation — the amount available for distribution after all obligations are met.",{"term":255,"definition":256},"Gross Profit","Revenue minus the direct cost of goods sold or services delivered, before operating expenses and overhead are deducted.",{"term":258,"definition":259},"Profit Share Percentage","The contractually agreed fraction of defined profit that the recipient is entitled to receive, expressed as a percentage.",{"term":261,"definition":262},"Calculation Period","The defined interval — monthly, quarterly, or annually — over which profit is measured and the recipient's entitlement is computed.",{"term":264,"definition":265},"Audit Rights","A contractual right allowing the recipient (or an appointed accountant) to inspect the payer's financial records to verify that profit calculations are accurate.",{"term":267,"definition":268},"Distributable Profit","Net profit after any agreed reserves, reinvestment set-asides, or priority payments have been deducted — the pool actually available for sharing.",{"term":270,"definition":271},"Clawback","A provision requiring the recipient to repay previously distributed profit shares if profits are later restated downward or if the recipient breaches the agreement.",{"term":273,"definition":274},"Threshold","A minimum profit level that must be reached before any sharing obligation is triggered — protects the business from paying out during marginal-profit periods.",{"term":276,"definition":277},"Cap","A maximum total payment the recipient can receive in a given period, regardless of how high profits rise — limits the payer's upside exposure.",{"term":279,"definition":280},"Profit and Loss Statement (P&L)","A financial statement summarizing revenues, costs, and expenses over a period, used as the reference document for profit share calculations.",{"term":282,"definition":283},"Earnout","A deferred payment mechanism tied to post-transaction financial performance — conceptually similar to profit sharing but typically used in M&A contexts.",[285,290,295,300,305,310,315,320,325,329],{"name":286,"plain_english":287,"sample_language":288,"common_mistake":289},"Parties and recitals","Identifies the business paying the profit share and the recipient, states the nature of their relationship, and explains why the agreement is being entered into.","This Profit Sharing Agreement is entered into as of [DATE] between [COMPANY LEGAL NAME], a [STATE/JURISDICTION] [ENTITY TYPE] ('Company'), and [RECIPIENT FULL NAME / ENTITY NAME] ('Recipient'). The parties wish to formalize the terms under which Recipient will participate in the profits of the Company.","Using a trade name instead of the registered legal entity name for the Company. If the entity name on the agreement differs from the entity that holds the bank account, enforcement becomes complicated.",{"name":291,"plain_english":292,"sample_language":293,"common_mistake":294},"Definition of profit","Specifies exactly what 'profit' means for the purposes of this agreement — gross, net, or a custom-defined figure — and lists every permitted deduction.","'Profit' means the net income of the Company for the relevant Calculation Period as determined in accordance with [GAAP / IFRS / COMPANY ACCOUNTING POLICY], after deduction of [LIST OF PERMITTED DEDUCTIONS], but before deduction of any amounts payable under this Agreement.","Leaving 'profit' undefined and defaulting to 'net income.' The Company may then deduct owner salaries, management fees, or related-party expenses that effectively eliminate distributable profit, leaving the recipient with nothing.",{"name":296,"plain_english":297,"sample_language":298,"common_mistake":299},"Profit share percentage and threshold","States the percentage of defined profit the recipient receives and any minimum profit level that must be exceeded before any payment is owed.","Company shall pay Recipient [X]% of Profit for each Calculation Period in which Profit exceeds $[THRESHOLD AMOUNT]. If Profit does not exceed the Threshold in any period, no payment shall be due for that period.","Setting no threshold at all. Without a floor, the Company may owe small payments in breakeven or marginal periods that create administrative burden without meaningfully compensating the recipient.",{"name":301,"plain_english":302,"sample_language":303,"common_mistake":304},"Calculation period and payment schedule","Defines how often profit is measured (monthly, quarterly, or annually) and when the resulting payment must actually be made to the recipient.","Profit shall be calculated on a [quarterly / annual] basis, with each Calculation Period ending on [DATE]. Payment of the applicable profit share shall be made within [30] days of the end of each Calculation Period, accompanied by a written calculation statement.","Agreeing on an annual calculation period but failing to specify a payment deadline. Recipients have waited 6–12 months for a calculation and then faced further delays on payment — combined, this erodes trust and triggers disputes.",{"name":306,"plain_english":307,"sample_language":308,"common_mistake":309},"Calculation statement and reporting","Requires the Company to deliver a written profit calculation to the recipient at each payment date, showing the inputs, deductions, and arithmetic that produced the payment.","Together with each payment, Company shall deliver a written Calculation Statement setting out total revenue, each permitted deduction with amounts, resulting Profit, Recipient's percentage, and the amount due. Recipient shall have [30] days to raise a written objection to any Calculation Statement.","Omitting any reporting obligation. Without a required statement, the recipient has no basis to verify accuracy and no defined window to raise a dispute — making audit rights practically meaningless.",{"name":311,"plain_english":312,"sample_language":313,"common_mistake":314},"Audit rights","Grants the recipient the right to inspect or have an independent accountant review the Company's financial records to verify that profit has been calculated correctly.","Recipient may, upon [30] days' written notice and no more than once per calendar year, appoint an independent certified public accountant to audit the Company's financial records for the purpose of verifying any Calculation Statement. Costs of the audit shall be borne by Recipient unless the audit reveals an underpayment of more than [5]%, in which case Company shall bear all reasonable audit costs.","No audit right at all — or an audit right with no cost-shifting mechanic. Without the cost-shifting threshold, the recipient has little incentive to audit and the Company has no incentive to calculate accurately.",{"name":316,"plain_english":317,"sample_language":318,"common_mistake":319},"Confidentiality","Prohibits the recipient from disclosing the Company's financial information accessed under this agreement to any third party.","Recipient shall keep all financial information disclosed under this Agreement strictly confidential and shall not disclose such information to any third party without the prior written consent of the Company, except as required by law or to Recipient's professional advisors bound by equivalent confidentiality obligations.","No confidentiality clause at all. Profit figures, margins, and customer revenue data disclosed for audit purposes are highly sensitive — without a confidentiality obligation, the recipient may share them with competitors or the public.",{"name":321,"plain_english":322,"sample_language":323,"common_mistake":324},"Term and termination","States how long the agreement runs, under what conditions either party may end it early, and what happens to profit accrued but not yet paid at termination.","This Agreement commences on [START DATE] and continues for [TERM / until terminated]. Either party may terminate upon [90] days' written notice. Termination shall not affect any profit share accrued but unpaid as of the termination date, which shall be paid within [30] days of termination.","No provision for accrued-but-unpaid profit on termination. Companies have terminated agreements immediately before a calculation date, arguing no amount was 'due' yet — leaving the recipient with nothing for a full period of contribution.",{"name":270,"plain_english":326,"sample_language":327,"common_mistake":328},"Requires the recipient to repay profit distributions if the underlying financials are restated downward or if the recipient causes the event that reduces profit.","If a Calculation Statement is amended within [24] months of issuance due to an accounting restatement, fraud, or material error, and such amendment results in an overpayment to Recipient, Recipient shall repay the excess within [30] days of written demand.","Clawback that is unlimited in time. Courts in several jurisdictions have declined to enforce indefinite clawback provisions as unreasonably punitive — cap the lookback period at 24–36 months.",{"name":330,"plain_english":331,"sample_language":332,"common_mistake":333},"Governing law and dispute resolution","Specifies which jurisdiction's law governs the agreement and how disputes — including disagreements over profit calculations — will be resolved.","This Agreement is governed by the laws of [STATE / PROVINCE / COUNTRY]. Any dispute arising under this Agreement, including disputes over Calculation Statements, shall be referred first to mediation and, if unresolved within [30] days, to binding arbitration administered by [AAA / JAMS / ICDR] in [CITY].","Choosing governing law that conflicts with where the recipient actually works or resides. Some jurisdictions impose mandatory employee-protection laws that override the chosen law for recipients who qualify as employees.",[335,340,345,350,355,360,365,370],{"step":336,"title":337,"description":338,"tip":339},1,"Identify the parties with full legal names","Enter the Company's registered legal name, entity type, and jurisdiction of formation, and the Recipient's full legal name or registered entity name. Include addresses for both parties.","Confirm the Company's legal name against its articles of incorporation or certificate of formation — a mismatch between the agreement and the bank account creates enforcement problems.",{"step":341,"title":342,"description":343,"tip":344},2,"Define 'profit' precisely and list every permitted deduction","Choose whether the share applies to gross profit, net income, or a custom-defined figure. Then list every deduction the Company is entitled to take before calculating the pool — owner salaries, depreciation, taxes, reserves, and debt service if applicable.","A recipient should negotiate to exclude owner/related-party management fees from permitted deductions, as these are often used to reduce distributable profit to near zero.",{"step":346,"title":347,"description":348,"tip":349},3,"Set the percentage, threshold, and any cap","Enter the recipient's percentage share, the minimum profit level that triggers a payment obligation, and — if appropriate — a maximum payment per period. All three numbers should reflect what was actually agreed verbally before drafting.","Confirm that the agreed percentage, applied to realistic profit projections, produces a payment that reflects the recipient's contribution — run the math before signing.",{"step":351,"title":352,"description":353,"tip":354},4,"Choose the calculation period and payment deadline","Select monthly, quarterly, or annual calculation periods and set a firm payment deadline — typically 30 days after period end. Annual periods are simpler administratively but delay cash to the recipient.","Quarterly calculation with a 30-day payment window is the most common balance between administrative simplicity and timely compensation.",{"step":356,"title":357,"description":358,"tip":359},5,"Draft the reporting and calculation statement requirements","Specify exactly what the written Calculation Statement must show — revenue, each line of permitted deductions, resulting profit, the percentage applied, and the amount due. Set a dispute window of 30 days from receipt.","Attach a sample Calculation Statement as a schedule to the agreement so both parties know what format is expected — this eliminates disputes about presentation later.",{"step":361,"title":362,"description":363,"tip":364},6,"Set the audit rights terms and cost-shifting threshold","Confirm how much notice is required to trigger an audit, how many audits are permitted per year, and at what underpayment percentage the Company bears the audit cost. Five percent is a common cost-shifting trigger.","Restrict audits to an independent CPA firm rather than the recipient personally — this protects the Company's financial confidentiality and produces more credible results.",{"step":366,"title":367,"description":368,"tip":369},7,"Define term, termination notice, and accrued-profit treatment","Set the agreement's duration or make it open-ended with a notice period for termination. Explicitly state that profit accrued for any partial calculation period up to termination must be calculated and paid within 30 days of the termination date.","Include a 'survival' clause confirming that confidentiality and clawback obligations survive termination — these are the provisions most likely to be disputed after the relationship ends.",{"step":371,"title":372,"description":373,"tip":374},8,"Execute before the recipient begins contributing","Both parties must sign before the recipient starts any work or contribution that would generate profit entitlement. Post-start signatures raise enforceability questions in common-law jurisdictions.","Use a witnessed or countersigned execution to create a clear record of when the agreement was signed — this is critical if the payment date or term start is ever disputed.",[376,380,384,388,392,396],{"mistake":377,"why_it_matters":378,"fix":379},"Leaving 'profit' undefined","An undefined profit term allows the Company to deduct owner salaries, related-party fees, and discretionary reserves before calculating the sharing pool — potentially reducing the recipient's payment to zero even in a profitable year.","Define 'profit' in a dedicated definitions clause with an exhaustive list of permitted deductions. Have both parties review and initial the deductions list specifically.",{"mistake":381,"why_it_matters":382,"fix":383},"No threshold or floor on payments","Without a minimum profit level, the Company owes small payments in breakeven periods that create administrative friction and may trigger employment-law complications for employee recipients.","Add a threshold clause stating no payment is due unless profit exceeds a defined minimum — e.g., $[X] per calculation period — and confirm that unprofitable periods do not carry forward as a deficit.",{"mistake":385,"why_it_matters":386,"fix":387},"Omitting a reporting and calculation statement requirement","Without a required written statement, the recipient has no mechanism to verify accuracy, no defined dispute window, and no paper trail for audits or litigation.","Require a written Calculation Statement with each payment showing all inputs and deductions. Set a 30-day window for the recipient to raise written objections.",{"mistake":389,"why_it_matters":390,"fix":391},"No accrued-profit provision on termination","If the agreement is silent on termination timing, a Company can terminate immediately before a calculation date and argue that no payment is due for the entire preceding period — leaving the recipient uncompensated for months of contribution.","Include an express clause requiring calculation and payment of profit accrued up to the termination date within 30 days, regardless of which party initiated termination.",{"mistake":393,"why_it_matters":394,"fix":395},"Signing after the recipient has already started contributing","In common-law jurisdictions, a contract signed after the relevant work or contribution has already begun may lack fresh consideration, making restrictive provisions — including clawback and confidentiality — potentially unenforceable.","Execute the agreement before the recipient takes any action that would generate a profit entitlement, or provide documented additional consideration if signing retrospectively.",{"mistake":397,"why_it_matters":398,"fix":399},"No confidentiality obligation on profit data","Profit figures, margins, and revenue data disclosed through calculation statements or audits are commercially sensitive. Without a confidentiality clause, the recipient is free to share them with competitors, staff, or the press.","Add a confidentiality clause covering all financial information disclosed under the agreement, with an explicit carve-out for the recipient's legal and accounting advisors bound by professional secrecy obligations.",[401,404,407,410,413,416,419,422,425],{"question":402,"answer":403},"What is a profit sharing agreement?","A profit sharing agreement is a legally binding contract between a business and one or more recipients — employees, partners, investors, or affiliates — that entitles the recipient to a defined percentage of the company's profits over an agreed period. It specifies how profit is defined, how it is calculated, when payments are made, and what rights the recipient has to verify the numbers. Unlike equity, a profit share does not grant ownership or voting rights in the business.\n",{"question":405,"answer":406},"What is the difference between a profit sharing agreement and an equity arrangement?","A profit sharing agreement gives the recipient a percentage of earnings without transferring any ownership stake, voting rights, or claim on assets at liquidation. An equity arrangement — shares, options, or an LLC membership interest — gives the recipient actual ownership with corresponding governance rights. Profit sharing is simpler to administer, easier to terminate, and does not require securities compliance in most jurisdictions, but it offers no upside from a business sale or liquidation.\n",{"question":408,"answer":409},"How is profit defined in a profit sharing agreement?","Profit is defined in the agreement itself — and the definition matters enormously. Common choices are gross profit (revenue minus cost of goods sold), net income (after all expenses and taxes), or a custom-defined figure that excludes specific items such as owner salaries, related-party fees, depreciation, or capital expenditures. Leaving profit undefined or defaulting to net income without restricting permitted deductions is the most common and costly drafting error in these agreements.\n",{"question":411,"answer":412},"Do profit sharing agreements need to be in writing?","While oral profit sharing arrangements can create legal obligations in some jurisdictions, a written agreement is strongly recommended. Without a written document, every term — profit definition, percentage, payment timing, and termination rights — becomes a credibility contest. Written agreements also satisfy audit and accounting requirements and provide a clear dispute-resolution mechanism.\n",{"question":414,"answer":415},"What audit rights should a profit sharing agreement include?","The recipient should have the right to appoint an independent CPA to review the Company's financial records at least once per year with reasonable advance notice — typically 30 days. The agreement should include cost-shifting: if the audit reveals an underpayment above a threshold (commonly 5%), the Company pays the audit cost; otherwise, the recipient does. This structure incentivizes accurate calculation without encouraging frivolous audits.\n",{"question":417,"answer":418},"Can an employee receive a profit share without it being treated as wages?","Tax treatment depends on jurisdiction. In the US, profit share payments to employees are generally treated as supplemental wages subject to income tax withholding and payroll taxes. In the UK, profit sharing paid to employees is typically taxable as employment income under PAYE. In Canada, payments to employees are employment income subject to CPP, EI, and income tax withholding. Consult a tax advisor to confirm the correct withholding and reporting treatment for your jurisdiction and recipient type.\n",{"question":420,"answer":421},"What happens to profit share if the recipient leaves mid-year?","The agreement should expressly address this. A common approach is to calculate and pay profit accrued on a pro-rata basis up to the termination date within 30 days of separation. Without this provision, a Company can terminate the agreement immediately before a calculation date and argue that no payment is owed for the entire preceding period. The surviving-obligations clause should also confirm that confidentiality and clawback survive termination.\n",{"question":423,"answer":424},"Is a profit sharing agreement enforceable if signed after the recipient starts work?","In common-law jurisdictions including the US, Canada, the UK, and Australia, a contract requires consideration — each party must give something of value. An employee or partner who has already been contributing before signing may be found to have provided no new consideration, making restrictive provisions such as clawback and confidentiality potentially unenforceable. Execute the agreement before the recipient begins contributing, or provide documented additional compensation — a bonus, salary increase, or other benefit — at the time of a retrospective signing.\n",{"question":426,"answer":427},"Do I need a lawyer to draft a profit sharing agreement?","For straightforward arrangements — a single employee or partner, a clear profit definition, and a simple percentage — a well-drafted template reviewed by an accountant for the tax implications is often sufficient. Engage a lawyer when the recipient is a significant contributor with leverage to negotiate, when the profit pool is material (above $50,000 annually), when the recipient is in a jurisdiction with strong employee-protection laws, or when related-party transactions could be used to manipulate the profit figure. A 1–2 hour attorney review typically costs $300–$600 and is worthwhile for any arrangement above $25,000 per year.\n",[429,433,437,441],{"industry":430,"icon_asset_id":431,"specifics":432},"Professional Services","industry-professional-services","Law firms, accounting practices, and consulting partnerships routinely use profit sharing to allocate partner distributions, with permitted deductions covering associate salaries and practice overhead.",{"industry":434,"icon_asset_id":435,"specifics":436},"Retail and Hospitality","industry-retail","Store managers and restaurant general managers are frequently rewarded through location-level profit sharing, requiring careful definition of allocated overhead and inter-company charges to avoid disputes.",{"industry":438,"icon_asset_id":439,"specifics":440},"Technology / SaaS","industry-saas","Early-stage SaaS companies use profit sharing to compensate key contributors before establishing a formal equity plan, with gross-margin-based definitions common to exclude large R&D and infrastructure costs from the pool.",{"industry":442,"icon_asset_id":443,"specifics":444},"Construction and Real Estate","industry-construction","Project-level profit sharing between developers and operating partners requires a project-specific profit definition, accounting for contingency reserves, cost overruns, and lender priority distributions before calculating the sharing pool.",[446,449,452,455],{"vs":45,"vs_template_id":447,"summary":448},"revenue-sharing-agreement-D13752","A revenue sharing agreement pays the recipient a percentage of top-line revenue before any expenses are deducted. A profit sharing agreement pays a percentage of what remains after expenses. Revenue sharing is simpler to calculate and harder for the Company to manipulate, but exposes the Company to paying out when it is losing money. Profit sharing aligns the recipient's incentive with the Company's bottom-line health but requires a carefully defined expense policy to prevent manipulation.",{"vs":86,"vs_template_id":450,"summary":451},"partnership-agreement-D178","A partnership agreement establishes a formal legal partnership between parties who co-own and co-operate a business, with shared liability and governance rights. A profit sharing agreement grants financial participation only, with no ownership, no liability exposure, and no governance rights. Use a partnership agreement when parties are joint owners; use a profit sharing agreement when one party is a contributor or service provider receiving a performance-based payment.",{"vs":102,"vs_template_id":453,"summary":454},"joint-venture-agreement-D172","A joint venture agreement creates a collaborative business structure between two independent entities for a defined project or purpose, typically with shared decision-making. A profit sharing agreement is a simpler, unilateral arrangement where one party pays another a share of profits without creating a new legal structure or shared governance. Joint ventures are appropriate for complex, multi-year collaborations; profit sharing suits simpler contributor or affiliate arrangements.",{"vs":116,"vs_template_id":456,"summary":457},"shareholders-agreement-D196","A shareholders agreement governs the rights and obligations of equity holders — including dividend policy, voting, share transfers, and exit mechanics. A profit sharing agreement operates entirely outside the equity structure and grants no ownership claim. Shareholders receive dividends from after-tax retained earnings under corporate law rules; profit share recipients receive contractual payments under the terms of this agreement, with different tax, priority, and governance implications.",{"use_template":459,"template_plus_review":463,"custom_drafted":467},{"best_for":460,"cost":461,"time":462},"Straightforward arrangements with a single employee or affiliate where the profit pool is under $25,000 per year and the profit definition is unambiguous","Free","30–60 minutes",{"best_for":464,"cost":465,"time":466},"Arrangements above $25,000 annually, recipients in jurisdictions with employee-protection laws, or agreements involving related-party transactions that could affect the profit calculation","$300–$700","2–4 days",{"best_for":468,"cost":469,"time":470},"Multi-party profit splits, complex profit definitions with multiple expense tiers, cross-border arrangements, or material earnout structures tied to a business sale","$1,500–$5,000+","1–3 weeks",[472,477,482,487],{"code":473,"name":474,"flag_asset_id":475,"note":476},"us","United States","flag-us","Profit share payments to employees are supplemental wages subject to federal income tax withholding at 22% (or aggregate method) and FICA payroll taxes. ERISA governs formal profit-sharing retirement plans, which have separate regulatory requirements distinct from contractual profit sharing. Non-compete or confidentiality provisions attached to a profit sharing agreement should be tailored to the employee's state, as California, Minnesota, and other states impose restrictions that override contractual choice-of-law clauses.",{"code":478,"name":479,"flag_asset_id":480,"note":481},"ca","Canada","flag-ca","Profit sharing paid to employees is employment income subject to CPP contributions, EI premiums, and income tax withholding at source under the Income Tax Act. Deferred profit-sharing plans (DPSPs) are a separate registered vehicle with CRA contribution limits and distinct tax treatment. Ontario and Quebec courts have held that profit sharing arrangements that become a consistent feature of employment may create a contractual entitlement the employer cannot unilaterally remove — making clear 'discretionary' language or a written agreement essential.",{"code":483,"name":484,"flag_asset_id":485,"note":486},"uk","United Kingdom","flag-uk","Profit share payments to employees are employment income taxable under PAYE and subject to National Insurance contributions for both employer and employee. HMRC-approved Share Incentive Plans (SIPs) offer a tax-advantaged route to employee profit sharing with separate regulatory requirements. Where a profit sharing arrangement gives an employee a contractual entitlement, any attempt to reduce or remove it unilaterally may constitute a breach of contract or constructive dismissal under the Employment Rights Act 1996.",{"code":488,"name":489,"flag_asset_id":490,"note":491},"eu","European Union","flag-eu","EU member states treat profit sharing differently: France has a mandatory profit-sharing regime (participation) for companies with 50 or more employees, creating statutory obligations separate from any contractual arrangement. Germany, the Netherlands, and Spain have their own tax treatment and labor-law implications for profit-related pay. GDPR applies to financial data disclosed under audit rights if it includes personal data about identifiable individuals. Always verify local rules before deploying a uniform profit sharing agreement across multiple EU jurisdictions.",[239,236,233,242,249,246,493,494,495,496,497,498],"independent-contractor-agreement-D160","non-disclosure-agreement-nda-D12692","employment-agreement_at-will-employee-D541","business-plan-canvas-(one-page)-D12527","financial-projections_12-months-D360","small-business-expense-report-D13396",{"emit_how_to":194,"emit_defined_term":194},{"primary_folder":95,"secondary_folder":501,"document_type":502,"industry":503,"business_stage":504,"tags":505,"confidence":510},"equity-and-mergers","agreement","general","all-stages",[506,502,507,508,509],"equity","legal","profit-sharing","compensation",0.95,"\u003Ch2>What is a Profit Sharing Agreement?\u003C/h2>\n\u003Cp>A \u003Cstrong>Profit Sharing Agreement\u003C/strong> is a legally binding contract between a business and one or more parties — employees, partners, investors, or affiliates — that grants the recipient a defined percentage of the company's profits under specific, agreed conditions. Unlike an equity arrangement, it transfers no ownership stake, no voting rights, and no claim on assets at liquidation; it creates a purely financial entitlement governed by the contractual definition of "profit," the agreed calculation method, and the payment schedule set out in the document. Because the profit figure can be heavily influenced by how expenses are categorized and deducted, the definition clause is the most consequential part of the agreement — a vague or absent definition routinely becomes the source of disputes that a clearly drafted contract would have prevented entirely.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Without a written profit sharing agreement, every material term of the arrangement — what counts as profit, which expenses are deductible, when payment is due, and what happens when the relationship ends — is subject to competing recollections. Recipients have gone an entire fiscal year without payment after a Company redefined permissible deductions mid-year; businesses have faced claims for profit shares on periods before any agreement was finalized. A clearly drafted agreement locks in the profit definition, the percentage, and the payment timeline before either party has a financial interest in changing them. It also gives the recipient enforceable audit rights — the only meaningful protection against a Company that calculates accurately in good times and creatively in bad ones. This template provides the structural framework to document all of those terms in a single enforceable document, reducing the risk of a profitable business relationship ending in a payment dispute.\u003C/p>\n",1778773535140]