Profit Sharing Agreement For Investors Template for Singapore

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Key Requirements PROMPT example:

Profit Sharing Agreement For Investors

"I need a Profit Sharing Agreement For Investors for my Singapore-based tech startup, where three angel investors will receive 20% of quarterly profits starting March 2025, with special provisions for early exit options after 18 months."

Document background
The Profit Sharing Agreement For Investors is essential for businesses seeking to raise capital while maintaining operational control. This document, structured under Singapore's legal framework, defines how profits will be shared with investors without necessarily diluting ownership. It's particularly relevant in Singapore's dynamic business environment, where alternative investment structures are increasingly popular. The agreement typically includes detailed mechanisms for profit calculation, distribution schedules, investor protections, and reporting requirements, all aligned with Singapore's regulatory requirements and business practices.
Suggested Sections

1. Parties: Identification and details of all parties involved in the agreement

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

3. Definitions: Key terms used throughout the agreement

4. Investment Terms: Amount, nature, and timing of investment

5. Profit Sharing Structure: Detailed mechanism for calculating and distributing profits

6. Payment Terms: Timing and method of profit distribution

7. Reporting Requirements: Financial reporting obligations and frequency

8. Term and Termination: Duration of agreement and termination provisions

9. Governing Law: Specification of Singapore law as governing law

Optional Sections

1. Exit Provisions: Terms for investor exit when dealing with long-term investments

2. Non-Competition: Restrictions on competitive activities when protecting business interests is crucial

3. Tag-Along Rights: Rights to join in sale of shares when multiple investors are involved

4. Management Rights: Investor's involvement in management decisions for active investors seeking management participation

Suggested Schedules

1. Investment Schedule: Detailed breakdown of investment amounts and timing

2. Profit Calculation Methodology: Detailed formula and examples of profit calculations

3. Financial Reporting Template: Standard format for required financial reports

4. Due Diligence Documents: List of completed due diligence items

5. Relevant Corporate Resolutions: Copies of corporate approvals for the agreement

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

Relevant legal definitions
Clauses
Industries

Companies Act (Cap. 50): Primary legislation governing corporate structures, shareholder rights, profit distribution mechanisms, and directors' duties and responsibilities in Singapore

Securities and Futures Act (Cap. 289): Regulatory framework for investment products and securities, defining collective investment schemes and establishing investor protection requirements

Financial Advisers Act (Cap. 110): Legislation governing financial advisory services, disclosure requirements, and investor protection measures

Income Tax Act: Tax legislation covering profit distribution taxation, including treatment of distributed profits and withholding tax requirements

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore covering investment schemes, compliance requirements, and risk disclosure

Contract Law (Common Law): Common law principles governing contract formation, terms and conditions, and remedies for breach in Singapore

Partnership Act (Cap. 391): Legislation governing partnership structures, profit sharing arrangements in partnerships, and partners' rights and obligations

Anti-Money Laundering Regulations: Regulatory requirements for preventing money laundering in investment and profit-sharing arrangements

Personal Data Protection Act: Legislation governing the collection, use, and disclosure of personal data in Singapore, relevant for handling investor information

Competition Law: Legal framework ensuring fair competition and preventing anti-competitive practices in business arrangements

Foreign Investment Regulations: Rules and regulations governing foreign investments and international profit-sharing arrangements in Singapore

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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