Profit-Share Agreement

License / Permit / Service Description

• Professional profit-share agreement documentation and coordination support for individuals and businesses in Malaysia. We assist with collecting party and project information, organising the proposed profit calculation and payment terms, coordinating supporting documents and liaising with an appointed legal professional for agreement preparation or review.Our service is suitable for parties collaborating on projects, providing services together or discussing a commercial arrangement involving a share of defined profits. We can also help organise information for an accountant or tax adviser where required.Legal drafting, legal advice, accounting or tax advice, stamp duty, business registration and third-party charges are separate unless expressly stated in the quotation. The agreement does not guarantee that a project will generate a profit.

Related Departments / Regulatory Bodies ​

• Parties entering into the profit-share arrangement.
• Appointed advocate and solicitor or legal firm.
• Accountant or tax adviser, where applicable.
• Inland Revenue Board of Malaysia (LHDN / HASiL), for tax or stamp duty matters where applicable.
• Companies Commission of Malaysia (SSM), where business or company information is relevant.
• Securities Commission Malaysia (SC), where the arrangement involves regulated capital market activities.
• Bank or financial institution, where applicable.
• Other relevant authorities, depending on the structure and activity.
  

License Name ( Bahasa Malayu )

• Perjanjian Pembahagian Keuntungan.
  

Application Scenarios & Business Necessity

• Two parties collaborate on a project and agree to share its profits.
• A business works with a service provider under a profit-sharing arrangement.
• Project participants need to define which costs are deducted before profit is calculated.
• Parties want to agree on the timing and method of profit distribution.
• A company needs to document each party’s role and contribution to a project.
• Parties need to clarify who receives customer payments and maintains project records.
• A business wants to establish how refunds, unpaid invoices or additional costs are treated.
• Parties need to discuss what happens if a project makes a loss.
• A client wants an existing profit-share agreement reviewed by an appointed lawyer.
• Parties need assistance coordinating signatures or stamp duty enquiries.

Important Rules & Compliance Standards

• The parties and the project or activity covered should be identified accurately.
• The agreement should clearly define whether the share is based on revenue, gross profit, net profit or another agreed calculation.
• Revenue included in the calculation and costs that may be deducted should be identified.
• The percentage, calculation period, payment date and supporting records should be clearly stated.
• The parties should agree on the treatment of unpaid invoices, refunds, taxes and additional costs.
• The agreement should address who receives funds, maintains records and provides statements.
• The treatment of project losses, cancellation and termination should be discussed.
• Profit-sharing does not automatically create share ownership or a registered business entity.
• The legal relationship, liabilities and tax treatment depend on the actual arrangement and applicable law.
• Regulatory requirements should be checked if the arrangement involves investment fundraising or regulated activities.
• Legal drafting and advice should be handled by an appropriately qualified and authorised legal professional.
• Stamp duty treatment should be checked based on the document’s contents and structure.
• Legal fees, accounting or tax advice, stamp duty and third-party charges are separate unless stated in the quotation.
  

Compound & Legal Penalties

• A dispute may arise if revenue, deductible costs or payment terms are unclear.
• A breach of the agreement may result in a civil claim or other remedies, depending on the facts and applicable law.
• Additional costs may arise from accounting review, legal advice or dispute resolution.
• Tax consequences may arise if income is incorrectly reported or relevant obligations are not met.
• Late stamping penalties may apply where the document is subject to stamp duty and is not stamped within the required period.
• Separate regulatory action may apply if the arrangement involves a regulated activity conducted without the required authorisation.
• A disagreement over profit-sharing does not automatically result in a government compound. The consequences depend on the agreement, facts and applicable law.

Frequently Asked Question