A Profit-Sharing Agreement is a legal contract that regulates the process of sharing partnership profits between involved parties. Its main purposes are to formalize the order of how the profits should be divided, determine who is participating in the profit partitioning, and secure the position of the parties involved in this agreement.
Generally, a letter of agreement for profit sharing can be signed between business partners who are members of the partnership (or of a joint venture). Nevertheless, sometimes the contract is signed between a company and its employee, who receives a part of the profit in addition to their salary. In this case, the received payment can depend on the profit that the company has received during an estimated period of time, or on the profit that the company has gained due to their employee's efforts.
A Profit-Sharing Agreement template can be downloaded below, or you can make your own using our online form builder.
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