Profit Distribution Agreement Template for Malaysia

A Profit Distribution Agreement is essential for businesses operating in Malaysia that need to formalize their profit-sharing arrangements. This document is particularly relevant for joint ventures, partnerships, and company groups where profits need to be distributed among multiple stakeholders. The agreement must comply with Malaysian corporate law, tax regulations, and financial reporting requirements. It typically includes detailed provisions for profit calculation, distribution mechanisms, payment schedules, and dispute resolution procedures. The document is crucial for establishing clear financial governance and avoiding potential conflicts related to profit sharing.

1. Parties: Identifies and provides details of all parties to the agreement

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

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Profit Calculation: Details the methodology for calculating distributable profits, including applicable accounting principles

5. Distribution Formula: Specifies the agreed proportions or percentages of profit distribution among parties

6. Payment Terms: Establishes timing, method, and currency of profit distributions

7. Accounting and Records: Sets out requirements for maintaining financial records and conducting audits

8. Rights and Obligations: Details the rights and responsibilities of each party regarding profit distribution

9. Tax Provisions: Addresses tax implications and responsibilities related to profit distributions

10. Term and Termination: Specifies duration of agreement and circumstances for termination

11. Confidentiality: Protects sensitive business and financial information

12. Dispute Resolution: Establishes procedures for resolving disagreements

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

14. General Provisions: Includes standard boilerplate clauses such as notices, amendments, and assignment