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Business Percentage Agreement for the United Kingdom

Business Percentage Agreement Template for England and Wales

A Business Percentage Agreement is a legally binding document under English and Welsh law that establishes the terms for sharing business revenues, profits, or other specified income between parties. It details the calculation methodology, payment terms, reporting requirements, and obligations of all parties involved. The agreement provides a framework for transparent financial arrangements and includes provisions for dispute resolution under the jurisdiction of England and Wales.

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Business Percentage Agreement

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What is a Business Percentage Agreement?

The Business Percentage Agreement is essential for structuring financial relationships between business parties in England and Wales. It is commonly used when establishing profit-sharing arrangements, commission structures, or revenue-sharing partnerships. This document provides clarity on calculation methods, payment schedules, and reporting requirements, helping prevent disputes and ensuring transparency. The agreement is particularly valuable for businesses seeking to formalize percentage-based financial arrangements while maintaining compliance with English and Welsh law.

What sections should be included in a Business Percentage Agreement?

1. Parties: Identification and details of all parties to the agreement

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Percentage Structure: Details of the agreed percentage split and calculation method

5. Payment Terms: Timing and method of percentage payments

6. Calculation Period: Defines the periods for which percentages are calculated

7. Reporting Requirements: Requirements for financial reporting and transparency

8. Term and Termination: Duration of agreement and termination provisions

9. Governing Law: Specification of applicable law and jurisdiction

What sections are optional to include in a Business Percentage Agreement?

1. Audit Rights: Right to audit financial records - use when dealing with significant amounts or complex calculations

2. Minimum Guaranteed Payments: Minimum payment guarantees regardless of performance - use when one party requires income security

3. Confidentiality: Provisions for protecting sensitive information - use when sharing sensitive business information

4. Non-Compete: Restrictions on competitive activities - use when protecting business interests is crucial

What schedules should be included in a Business Percentage Agreement?

1. Calculation Method Schedule: Detailed explanation of how percentages are calculated

2. Reporting Template: Standard format for regular financial reporting

3. Excluded Items Schedule: List of items excluded from percentage calculations

4. Key Performance Indicators Schedule: Metrics used to measure performance if relevant to calculations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions




























Clauses

























Industries

Common Law of Contract: Fundamental principles of contract formation, including offer, acceptance, consideration, and intention to create legal relations

Law of Property (Miscellaneous Provisions) Act 1989: Governs formalities for creating certain types of contracts, particularly those relating to land and property interests

Contracts (Rights of Third Parties) Act 1999: Regulates how third parties may enforce terms of a contract and their rights under it

Partnership Act 1890: Defines and regulates business partnerships and their operations in England and Wales

Companies Act 2006: Primary legislation governing company formation, administration, and operations in the UK

Commercial Agents (Council Directive) Regulations 1993: Regulates the relationship between commercial agents and their principals

Financial Services and Markets Act 2000: Regulates financial services and markets in the UK, including investment agreements

Enterprise Act 2002: Covers competition law and enterprise regulation in the UK

Competition Act 1998: Prohibits anti-competitive behavior and regulates market competition

Consumer Rights Act 2015: Protects consumer interests and regulates business-to-consumer contracts

Consumer Protection from Unfair Trading Regulations 2008: Prohibits unfair commercial practices and protects consumer interests

Value Added Tax Act 1994: Governs VAT obligations and requirements in business transactions

Income Tax Act 2007: Regulates income tax implications of business agreements and profit sharing

Corporation Tax Act 2010: Governs taxation of corporate entities and their business arrangements

UK GDPR: Regulates the processing and handling of personal data in the UK post-Brexit

Data Protection Act 2018: Implements and supplements the UK GDPR, providing the framework for data protection

Arbitration Act 1996: Governs arbitration proceedings and dispute resolution mechanisms

Civil Procedure Rules: Procedural rules governing civil litigation in England and Wales

Proceeds of Crime Act 2002: Addresses money laundering and proceeds of crime in business transactions

Money Laundering Regulations 2017: Sets out detailed requirements for preventing money laundering in business relationships

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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