Profit Sharing Agreement by EasyLegalDocs
Updated 17 October 2025
This Profit Sharing Agreement outlines the terms under which a Representative will receive a percentage of profits generated from their direct efforts for a Company. It details profit allocation, roles and responsibilities, confidentiality, and procedures for dispute resolution and termination. The agreement establishes an independent contractor relationship between the parties.
PROFIT SHARING AGREEMENT
This Profit Sharing Agreement (hereinafter referred to as the "Agreement") is made and effective [EFFECTIVE DATE],
BY AND BETWEEN: | [COMPANY NAME], with an address of [COMPANY ADDRESS], hereinafter referred to as the “Company.” |
AND: | [REPRESENTATIVE NAME], with an address of [REPRESENTATIVE ADDRESS], hereinafter referred to as the “Representative,” collectively referred to as the “Parties.” |
Duration
This Agreement shall be effective from the date of execution and continue until ____________.
Profit Allocation
Profit Sharing: The Representative is entitled to receive ____________% of profits generated from the products. The said profits are to be derived directly from the Representative's efforts.
Direct Result: For the purposes of this Agreement, a "direct result" refers to any customer engagement that culminates in a completed sale.
Profit Calculation: Profits shall be computed as follows: __________________________________________________________________________________
(Specify the formula or method for calculating the Representative's share of the profits, including any deductions, expenses, or other adjustments that will be made. E.g., "Total Revenue - Operational Costs = Profit; Representative's Share = Profit x ___________%")
Roles and Responsibilities
The Representative shall conduct research on potential customers, complete any necessary paperwork, and undertake any other tasks as may be assigned or unassigned by the Company.
Relationship Status
Both Parties agree that their relationship is that of independent contractors.
Confidentiality
The Representative commits to maintaining confidentiality regarding all information identified or acknowledged as confidential by the Company, both during the term of this Agreement and for a period of ____________ years thereafter.
Termination Effects
Upon termination:
The Representative will continue to accrue profit shares from ongoing sales directly attributable to their efforts.
The Representative will direct any inquiries or questions concerning the product to the Company.
The Representative will return or destroy any proprietary information belonging to the Company.
Amendments
Any modifications to this Agreement must be in writing and bear the signatures of both Parties for the amendments to be enforceable.
Severability
Should any provision of this Agreement be declared void or unenforceable by a court of competent jurisdiction, the remainder of the Agreement will continue in full force and effect.
Dispute Resolution
All disputes arising out of this Agreement shall be resolved through ____________ (Arbitration/Mediation/Negotiation) and will be subject to the laws of ____________.
Governing Law
This Agreement is governed by the laws of ____________.
Entire Agreement
This document embodies the entire Agreement between the Parties and supersedes all previous agreements, understandings, and arrangements, whether oral or written, related to the subject matter herein.
Signatures
By affixing their signatures below, the Parties hereby consent to all terms and conditions set forth in this Agreement:
COMPANY | REPRESENTATIVE |
_____________________________Signed (signature) | _____________________________Signed (signature) |
_____________________________Print Name | _____________________________Print Name |
_____________________________Date | _____________________________Date |
About this template
What is this template?
Profit Sharing Agreement by EasyLegalDocs is a free, ready-to-use Commercial Contracts template you can open, customize, and download on GitLaw. It gives you a professionally structured starting point, so you never have to draft from a blank page. The wording is plain and modern, organized into clear sections that are easy to read, edit, and adapt to your own situation before you share or sign it.
When should you use it?
Reach for this Commercial Contracts template whenever you need a reliable agreement quickly and want to be sure the essentials are covered. It suits individuals, freelancers, startups, and established businesses alike. Instead of paying for a document drafted from scratch, you can start here, tailor the details to your arrangement, and have a polished draft ready in minutes. Always review the final wording against the laws that apply where you live or do business.
What's typically included?
A well-drafted Commercial Contracts usually sets out the parties involved, the scope of the agreement, and each side's rights and responsibilities. Expect sections covering key terms and definitions, how long the agreement lasts, how it can be ended, and what happens if something goes wrong. This template brings those building blocks together in a sensible order, so you can focus on the specifics rather than worrying about what to include. Open it to read the full document, then sign up to edit, negotiate, and e-sign it directly in GitLaw.