Question 1

What is a Profit Share Agreement?

Accepted Answer

A Profit Share Agreement is a contract that governs how the net profits of a business venture are divided between parties. Unlike revenue sharing, profit sharing accounts for expenses, meaning parties share what remains after costs are deducted from revenue.

Question 2

Is this template compliant with South African law?

Accepted Answer

Yes, this template is drafted in accordance with South African contract law and partnership principles. It clearly defines the profit-sharing arrangement to avoid disputes and provides mechanisms for calculating and distributing profits.

Question 3

Can I customize this template?

Accepted Answer

Yes, the template includes customization options for profit split percentages, expense allocation, payment frequency, accounting methods, and the specific contributions or services each party provides to the venture.

Question 4

What key clauses are included in the template?

Accepted Answer

The template covers: party contributions; profit calculation methodology; expense allocation; distribution percentages and timing; accounting and reporting requirements; term and termination; dispute resolution; and confidentiality provisions.

Question 5

Who should use this template?

Accepted Answer

This template is suitable for joint ventures, business partnerships, investor arrangements, or any situation where parties collaborate on a venture and wish to share the resulting profits rather than just revenue.

Question 6

What format is the template delivered in?

Accepted Answer

The template is delivered in Microsoft Word format (.docx), allowing parties to negotiate and customize the profit-sharing terms before signing.

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Template Profit ShareAgreement