Profit Sharing Agreement Template for Singapore

A Profit Sharing Agreement is essential when multiple parties wish to formalize their arrangement for sharing business profits. This document, governed by Singapore law, specifically details how profits will be calculated, distributed, and managed among the participating parties. The agreement typically includes provisions for financial reporting, audit rights, and dispute resolution mechanisms. It's particularly important for businesses operating in Singapore's commercial environment, where clear documentation of profit-sharing arrangements is crucial for both legal compliance and tax purposes. The agreement helps prevent future disputes by clearly establishing each party's rights and obligations.

1. Parties: Identification and details of all parties involved in the profit sharing arrangement

2. Background: Context and purpose of the profit sharing arrangement

3. Definitions: Key terms used throughout the agreement including profit calculation methods, accounting periods, and relevant financial terms

4. Profit Calculation: Method and basis for calculating distributable profits, including accounting principles to be applied

5. Distribution Mechanism: Process and timing of profit distributions, including profit sharing ratios and payment procedures

6. Payment Terms: Details of how and when payments will be made, including payment methods and currency

7. Term and Termination: Duration of agreement and circumstances under which the agreement can be terminated

8. Governing Law: Specification of Singapore law as governing law and jurisdiction for disputes