Profit Sharing Agreements

Profit Sharing Agreements are formal arrangements between parties—such as partners, investors, or employees—where a portion of the company's or project's profits is distributed based on predetermined terms. These agreements specify how profits are calculated, when and how payments are made, and the criteria for sharing. They align interests by providing incentives for increased performance and success. Profit sharing can motivate contributors and provide a fair method to reward contributions, while also clarifying expectations and reducing disputes related to earnings distribution.