60 40 Partnership Agreement for Malaysia

60 40 Partnership Agreement Template for Malaysia

A comprehensive legal document governed by Malaysian law that establishes and regulates a partnership arrangement with a 60-40 profit and loss sharing ratio between two parties. The agreement is structured in accordance with the Malaysian Partnership Act 1961 and related legislation, defining the rights, responsibilities, and obligations of both the majority and minority partners. It includes detailed provisions for capital contributions, management control, decision-making processes, profit distribution, and dispute resolution mechanisms, all tailored to comply with Malaysian legal requirements and business practices.

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What is a 60 40 Partnership Agreement?

This 60-40 Partnership Agreement is designed for use in Malaysia when two parties wish to enter into a partnership with an unequal ownership and profit-sharing structure. The document is particularly relevant when one partner contributes more capital, expertise, or resources and therefore warrants a larger (60%) share of the business. It complies with the Malaysian Partnership Act 1961 and includes essential provisions required by Malaysian law for partnership formations. The agreement covers crucial aspects such as capital contributions, profit and loss sharing, management rights, partner obligations, and exit procedures. It's commonly used in new business ventures, professional practices, or when restructuring existing partnerships in Malaysia. The document provides a clear framework for the 60-40 partnership structure while protecting both partners' interests and ensuring legal compliance.

What sections should be included in a 60 40 Partnership Agreement?

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

2. Background: Explains the context and intention of the partners to form a partnership

3. Definitions: Defines key terms used throughout the agreement

4. Partnership Formation: Establishes the creation of the partnership and its intended business purpose

5. Capital Contributions: Details the initial and any subsequent capital contributions from each partner

6. Profit and Loss Sharing: Specifies the 60-40 split of profits and losses between partners

7. Management and Decision Making: Outlines management structure and decision-making processes

8. Partners' Duties and Obligations: Details the responsibilities and obligations of each partner

9. Banking and Financial Matters: Specifies banking arrangements and financial management procedures

10. Partnership Property: Defines ownership and handling of partnership assets

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

12. Governing Law: Confirms Malaysian law as governing law and jurisdiction

13. Execution: Signature blocks and execution formalities

What sections are optional to include in a 60 40 Partnership Agreement?

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

2. Intellectual Property Rights: Addresses ownership and use of IP - include when partnership involves creation or use of intellectual property

3. Insurance: Specifies required insurance coverage - include for high-risk businesses

4. Dispute Resolution: Details process for resolving disputes - include when partners want specific dispute resolution mechanisms

5. Death or Incapacity: Procedures following death or incapacity of a partner - include for long-term partnerships

6. Admission of New Partners: Process for admitting new partners - include if future expansion is contemplated

7. Good Faith and Fair Dealing: Additional provisions on partner conduct - include when partners want explicit moral obligations

8. Force Majeure: Provisions for unforeseen circumstances - include for businesses vulnerable to external disruptions

What schedules should be included in a 60 40 Partnership Agreement?

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

2. Schedule 2 - Business Plan: Initial business plan and objectives of the partnership

3. Schedule 3 - Management Structure: Detailed organizational structure and management procedures

4. Schedule 4 - Partnership Property: Inventory of partnership assets and their agreed values

5. Schedule 5 - Profit Distribution Rules: Detailed rules and timing for profit distributions

6. Appendix A - Partner Information: Detailed information about each partner including contact details

7. Appendix B - Operating Procedures: Day-to-day operational procedures and policies

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 legal definitions
Clauses
Relevant Industries

Professional Services

Retail

Food and Beverage

Technology

Manufacturing

Construction

Real Estate

Healthcare

Education

Consulting

Agriculture

Trading

Creative Industries

Financial Services

Relevant Teams

Legal

Finance

Compliance

Corporate Secretarial

Risk Management

Business Development

Operations

Executive Leadership

Corporate Governance

Strategy

Relevant Roles

Business Owner

Managing Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Business Development Manager

Company Director

Operations Manager

Finance Director

Partnership Manager

Compliance Officer

Risk Manager

General Manager

Business Consultant

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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