50 50 Profit Sharing Agreement for Malaysia

50 50 Profit Sharing Agreement Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that establishes a 50-50 profit sharing arrangement between two parties. This document outlines the terms and conditions for sharing profits equally from a business venture, including detailed provisions for profit calculation, distribution mechanisms, management responsibilities, and dispute resolution procedures. The agreement complies with Malaysian Partnership Act 1961 and relevant corporate laws, while incorporating provisions for both conventional and Islamic banking principles where applicable. It includes specific clauses for capital contributions, operational management, financial reporting requirements, and exit strategies.

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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 Malaysian business contexts where two parties agree to share profits equally from a joint business venture. This document type is particularly relevant in situations where parties contribute different resources (such as capital, expertise, or assets) but agree to an equal distribution of profits. The agreement must comply with Malaysian legislation, including the Partnership Act 1961, Contracts Act 1950, and relevant tax laws. It can be adapted for various business structures and may include Shariah-compliant provisions when required. The document typically contains comprehensive sections on profit calculation methods, management rights, capital contributions, and dispute resolution mechanisms, making it suitable for both simple business partnerships and complex joint ventures.

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 profit sharing agreement

2. Background: Explains the context of the agreement and the intention of the parties to enter into a profit sharing arrangement

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

4. Scope of Business: Detailed description of the business venture or project covered by the profit sharing arrangement

5. Term and Commencement: Specifies when the agreement begins and its duration

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

7. Profit Calculation and Distribution: Methodology for calculating profits and the 50-50 distribution mechanism

8. Management and Control: Outlines decision-making authority and day-to-day management responsibilities

9. Books and Records: Requirements for maintaining financial records and accounting practices

10. Banking Arrangements: Details of bank accounts and banking procedures for the business

11. Representations and Warranties: Standard declarations by both parties about their capacity and authority

12. Termination: Circumstances under which the agreement can be terminated and the process

13. Dispute Resolution: Process for resolving disagreements between parties

14. Governing Law: Specifies Malaysian law as governing law and jurisdiction

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

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

1. Non-Competition: Restricts parties from competing with the business - include when parties have other business interests

2. Intellectual Property Rights: Addresses ownership and use of IP - include when the business involves creation or use of IP

3. Confidentiality: Protects sensitive business information - include when proprietary information will be shared

4. Insurance: Requirements for business insurance - include when specific insurance coverage is necessary

5. Assignment: Rules for transferring rights under the agreement - include when transfer rights need to be restricted

6. Force Majeure: Provisions for unforeseen circumstances - include when business is susceptible to external disruptions

7. Shariah Compliance: Islamic law compliance provisions - include when parties require adherence to Shariah principles

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

1. Schedule 1 - Business Plan: Detailed business plan including projected financials and operational strategy

2. Schedule 2 - Initial Capital Contributions: Itemized list of initial capital contributions from each party

3. Schedule 3 - Profit Calculation Method: Detailed methodology and formulas for calculating distributable profits

4. Schedule 4 - Management Structure: Organizational chart and management responsibilities

5. Schedule 5 - Assets Register: List of assets owned by or contributed to the business

6. Appendix A - Financial Reporting Templates: Standard templates for regular financial reporting

7. Appendix B - Required Insurance Coverage: Details of mandatory insurance policies and coverage levels

Authors

Alex Denne

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

Jurisdiction

Malaysia

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Real Estate Development

Technology and Software

Manufacturing

Retail and Distribution

Food and Beverage

Professional Services

Construction

Agriculture

E-commerce

Healthcare Services

Education and Training

Tourism and Hospitality

Relevant Teams

Legal

Finance

Business Development

Operations

Compliance

Corporate Secretarial

Risk Management

Strategy

Investment

Partnership Management

Relevant Roles

Chief Executive Officer

Managing Director

Business Development Manager

Chief Financial Officer

Legal Counsel

Partnership Manager

Operations Director

Investment Manager

Project Manager

Finance Director

Company Secretary

Compliance Officer

Business Owner

Entrepreneur

Joint Venture Coordinator

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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