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Profit Sharing Agreement Between Partners for United Arab Emirates

Profit Sharing Agreement Between Partners Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions for sharing profits between business partners. This document outlines the mechanism for profit distribution, partner responsibilities, management structure, and financial reporting requirements in accordance with UAE Commercial Companies Law (Federal Law No. 2 of 2015) and related regulations. It includes provisions for capital contributions, profit calculation methods, distribution frequencies, and dispute resolution procedures while ensuring compliance with UAE business regulations and accounting standards.

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What is a Profit Sharing Agreement Between Partners?

The Profit Sharing Agreement Between Partners is a crucial document used when two or more parties wish to formalize their arrangement for sharing business profits in the United Arab Emirates. This agreement is particularly important in the UAE business context, where clear documentation of financial arrangements is required for regulatory compliance and partner protection. The document addresses key aspects including profit calculation methods, distribution mechanisms, partner rights and obligations, and governance structures, all while ensuring compliance with UAE Commercial Companies Law and related regulations. It's commonly used for new business partnerships, joint ventures, or when existing businesses restructure their profit sharing arrangements, and must be drafted in accordance with both federal and emirate-level requirements.

What sections should be included in a Profit Sharing Agreement Between Partners?

1. Parties: Identification and details of all partners entering into the agreement, including full legal names, addresses, and registration details if corporate entities

2. Background: Context of the partnership, business purpose, and general intent of the profit sharing arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement, including financial terms, accounting periods, and profit-related terminology

4. Partnership Structure: Legal structure of the partnership, ownership percentages, and capital contributions

5. Profit and Loss Sharing: Detailed mechanism for calculating and distributing profits and losses, including timing and method of distributions

6. Management and Control: Decision-making processes, voting rights, and management responsibilities of partners

7. Financial Records and Accounting: Requirements for maintaining financial records, accounting standards to be followed, and audit requirements

8. Capital Accounts: Management of partner capital accounts, including initial and additional contributions

9. Banking and Financial Matters: Banking arrangements, signing authorities, and financial controls

10. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

11. Dispute Resolution: Procedures for resolving disputes between partners, including mediation and arbitration provisions

12. Governing Law: Specification of UAE law as governing law and relevant jurisdictional matters

13. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Profit Sharing Agreement Between Partners?

1. Intellectual Property Rights: Include when the partnership involves creation or use of intellectual property

2. Non-Competition and Confidentiality: Include when partners need to be restricted from competing activities or when dealing with sensitive information

3. Exit Mechanisms: Include detailed procedures for partner exit, buy-out provisions when partners want specific exit options

4. New Partner Admission: Include when the partnership anticipates bringing in new partners in the future

5. Special Project Provisions: Include when profit sharing varies for specific projects or business lines

6. Zakat Provisions: Include when partners need to address Islamic financial principles

7. International Operations: Include when partnership operates across multiple jurisdictions

What schedules should be included in a Profit Sharing Agreement Between Partners?

1. Schedule 1: Capital Contributions: Detailed list of initial capital contributions from each partner

2. Schedule 2: Profit Sharing Ratios: Detailed breakdown of profit sharing percentages and any variable elements

3. Schedule 3: Accounting Principles: Specific accounting principles and procedures to be followed

4. Schedule 4: Management Structure: Detailed organizational structure and management responsibilities

5. Schedule 5: Business Plan: Initial business plan and financial projections

6. Appendix A: Partner Details: Detailed information about each partner including contact information and representatives

7. Appendix B: Financial Procedures: Detailed procedures for financial management and profit distribution

8. Appendix C: Reporting Ƶ: Standard templates for financial reporting and profit distribution calculations

Authors

Alex Denne

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

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions











































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Relevant Industries

Professional Services

Real Estate

Trading & Distribution

Technology & Software

Manufacturing

Retail

Construction

Healthcare

Hospitality

Financial Services

Consulting

E-commerce

Media & Entertainment

Education

Food & Beverage

Relevant Teams

Legal

Finance

Executive Leadership

Corporate Governance

Compliance

Business Development

Operations

Partnership Management

Investment

Risk Management

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Partner

Finance Director

Legal Counsel

Business Development Manager

Company Secretary

Financial Controller

Managing Director

Operations Director

Compliance Officer

Partner Relations Manager

Investment Manager

Board Member

Shareholder Representative

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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