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50 50 Profit Sharing Agreement for Philippines

50 50 Profit Sharing Agreement Template for Philippines

This document is a comprehensive profit sharing agreement governed by Philippine law, establishing a 50-50 split of profits between two or more parties. It outlines the terms and conditions for sharing business profits equally, including detailed provisions for profit calculation, distribution mechanisms, management responsibilities, and dispute resolution procedures. The agreement complies with Philippine corporate laws, tax regulations, and relevant business statutes, providing a legally sound framework for equal profit sharing arrangements while ensuring adherence to local regulatory requirements and business practices.

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What is a 50 50 Profit Sharing Agreement?

The 50-50 Profit Sharing Agreement is a crucial legal document used in the Philippine business environment when two or more parties wish to establish an equal profit-sharing arrangement. This document is particularly relevant for joint ventures, partnerships, or collaborative business ventures where parties contribute equally and agree to share profits on a 50-50 basis. The agreement must comply with Philippine laws, including the Civil Code, Corporation Code, and relevant tax regulations. It typically includes comprehensive provisions covering profit calculation methods, distribution procedures, management rights, dispute resolution mechanisms, and termination conditions. This type of agreement is commonly used in new business ventures, strategic partnerships, and joint commercial undertakings where parties want to ensure clear, equitable profit distribution while maintaining legal compliance with Philippine regulatory requirements.

What sections should be included in a 50 50 Profit Sharing Agreement?

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

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

3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty

4. Scope of Agreement: Outlines the specific business activities or ventures covered by the profit sharing arrangement

5. Profit Sharing Structure: Details the 50-50 split mechanism, including calculation methods and timing of distributions

6. Capital Contributions: Specifies initial and ongoing capital contributions required from each party

7. Management and Control: Establishes decision-making processes and operational control parameters

8. Financial Records and Reporting: Sets requirements for maintaining financial records and reporting obligations

9. Distribution of Profits: Details the mechanism and timing for profit distribution

10. Tax Obligations: Addresses tax responsibilities and compliance requirements

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

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

13. Governing Law: Confirms Philippine law as governing law and relevant jurisdiction

14. General Provisions: Includes standard legal provisions such as notices, amendments, and severability

What sections are optional to include in a 50 50 Profit Sharing Agreement?

1. Non-Competition: Restricts parties from engaging in competing businesses - include when parties have other business interests

2. Intellectual Property Rights: Addresses ownership and usage of IP - include when the business involves intellectual property

3. Confidentiality: Protects sensitive business information - include when proprietary information is involved

4. Insurance: Specifies required insurance coverage - include when business activities carry significant risks

5. Employee Management: Addresses hiring and management of employees - include when the venture will have employees

6. Exit Strategy: Details procedures for party exit or business sale - include when parties want specific exit provisions

7. Force Majeure: Addresses unforeseen circumstances - include when business is susceptible to external disruptions

What schedules should be included in a 50 50 Profit Sharing Agreement?

1. Schedule A - Initial Capital Contributions: Detailed breakdown of each party's initial capital contributions

2. Schedule B - Profit Calculation Method: Detailed methodology for calculating distributable profits

3. Schedule C - Business Plan: Initial business plan and operational guidelines

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

5. Appendix 1 - Financial Reporting Template: Standard format for regular financial reports

6. Appendix 2 - Bank Account Details: Designated bank accounts for profit distribution

7. Appendix 3 - Key Performance Indicators: Metrics for measuring business performance

Authors

Alex Denne

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

Jurisdiction

Philippines

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions






























Clauses






























Relevant Industries

Retail

Technology

Manufacturing

Food and Beverage

Real Estate

Professional Services

Agriculture

E-commerce

Construction

Tourism and Hospitality

Healthcare

Education

Digital Services

Consulting

Relevant Teams

Legal

Finance

Business Development

Corporate Affairs

Operations

Compliance

Tax

Strategy

Investment

Risk Management

Relevant Roles

Business Owner

Managing Director

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Business Development Manager

Partnership Manager

Investment Manager

Corporate Lawyer

Finance Director

Operations Manager

Compliance Officer

Company Secretary

Entrepreneur

Start-up Founder

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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