South Africa
Profit Sharing Agreement
R749
Create a profit sharing agreement recording how profits from a business, project, investment, sale, partnership, referral, or joint activity will be calculated, verified, distributed, and audited.
A Profit Sharing Agreement is used where parties agree to share profits from a business, project, investment, sale, referral, transaction, partnership, or commercial opportunity.
South African legal context (2026 checklist)
The agreement should define “profit” carefully. Disputes often arise because parties do not distinguish between revenue, gross profit, net profit, collected income, taxable income, and cash available for distribution.
- South African common law of contract
- South African common law of partnership, where applicable
- Companies Act 71 of 2008, where a company is involved
- Income Tax Act 58 of 1962
- Value-Added Tax Act 89 of 1991
- Tax Administration Act 28 of 2011
- Competition Act 89 of 1998
- Protection of Personal Information Act 4 of 2013
Use this as a starting point only. Verify current gazetted amendments, tribunal rules, and SARS / DOL circulars that may apply to your matter.
Typical questions we'll walk you through
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Who are the parties sharing profits?
What business, project, or opportunity will generate the profits?
What contribution will each party make?
What percentage or formula will apply?
Will losses also be shared?
How will profit be calculated?
What expenses may be deducted?
When will profits be distributed?
Who keeps financial records?
Will parties have audit or inspection rights?
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