Descriptoin
- A Profit-Share Agreement is a legally binding contract between two or more parties that outlines the terms for sharing profits generated from a joint business venture, partnership, or collaboration. It establishes the responsibilities, contributions, and profit allocation among the involved parties.
GOV Department
- Suruhanjaya Syarikat Malaysia (SSM) / Companies Commission of Malaysia
License Type
- Perjanjian Perkongsian Keuntungan
Details
- Specifies the profit-sharing ratio or percentage for each party.
- Defines the contributions of each party, such as capital, labor, or resources.
- Outlines the accounting methods, timelines, and procedures for profit distribution.
- Includes provisions for managing losses, termination, and dispute resolution.
- Ensures compliance with the Partnership Act 1961 or other relevant laws.
Important Rules
- All parties must agree to and sign the agreement to make it enforceable.
- The agreement must clearly state the profit-sharing formula and the timeline for distribution.
- Any changes to the agreement require mutual consent and documentation.
- Profits and losses must be accounted for transparently and in compliance with applicable tax laws.
- The agreement must include provisions for dispute resolution to address conflicts.
Compound & Punishment
- Failure to formalize a profit-share agreement may lead to:
- Disputes over profit allocation or contributions.
- Legal action or dissolution of the business relationship.
- Breach of the agreement may result in:
- Financial penalties or compensation claims by aggrieved parties.
- Loss of rights to future profits or partnership assets.
- Non-compliance with tax obligations related to profit distribution may result in fines or penalties from regulatory authorities.
Advisor
Jeffrey Eh Hao Yih , Director
Jeffrey has been providing expert guidance for businesses dealing with ongoing challenges. With his expertise, he aids clients in strategic business planning, streamlining operations, and enhancing productivity. Additionally, Jeffrey offers diverse business technology services to help digitize traditional businesses effectively.