Distributions clause: Copy, customize, and use instantly
Introduction
A distributions clause outlines the terms and conditions under which profits, revenues, or goods are to be distributed among the parties in the agreement. This clause is crucial for ensuring that both parties are clear about how the benefits of the contract will be allocated. It often covers the distribution of financial proceeds, inventory, or other assets relevant to the business arrangement.
Below are templates for distribution clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Revenue distribution clause
This clause specifies how revenue or profits will be shared between the parties.
[Party] agrees to distribute all revenues generated from [specified product/service] under this Agreement as follows: [X]% to [Party 1] and [Y]% to [Party 2]. The distribution will be made on a [monthly/quarterly] basis, within [X] days after the end of each period.
Profit-sharing distribution clause
This clause provides details on the sharing of profits between the parties.
The profits resulting from the activities under this Agreement shall be distributed as follows: [Party 1] shall receive [X]% and [Party 2] shall receive [Y]%, based on the net profit after all applicable expenses and deductions are accounted for.
Equity distribution clause
This clause specifies how equity is to be distributed between the parties.
[Party 1] and [Party 2] shall receive equity in the business or project based on their contribution to the capital and resources. [Party 1] will hold [X]% equity, while [Party 2] will hold [Y]% equity, with distributions being made annually.
Revenue-sharing distribution clause
This clause sets out the terms for sharing the revenues from a business venture.
All revenues generated from [specific product/service] will be shared between the parties based on the following formula: [Party 1] will receive [X]% and [Party 2] will receive [Y]%. Revenue sharing will occur on a [monthly/quarterly] basis, and payments will be made within [X] days of the end of each period.
Product distribution clause
This clause defines the terms for distributing products to designated parties or markets.
[Party 1] agrees to distribute [specified products] to [specified regions/markets] as part of this Agreement. [Party 1] will retain exclusive distribution rights for [X] years, and any product sales will be divided [X]% for [Party 1] and [Y]% for [Party 2].
Inventory distribution clause
This clause governs the distribution of inventory among the parties.
The inventory of [specified goods/products] shall be distributed as follows: [Party 1] will receive [X] units, and [Party 2] will receive [Y] units. The inventory will be replenished periodically based on sales and demand forecasts.
License fee distribution clause
This clause outlines the distribution of fees paid for licensing rights.
The licensing fees for the use of [intellectual property, technology, etc.] under this Agreement will be split between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% of the licensing fees, while [Party 2] will receive [Y]%. Payments will be made annually within [X] days after receipt of the fees.
Sales commission distribution clause
This clause defines how commissions from sales will be divided between the parties.
[Party 1] and [Party 2] agree to split the sales commissions generated from sales of [specified product/service] under this Agreement. [Party 1] will receive a commission of [X]% of each sale, and [Party 2] will receive [Y]% of each sale.
Cash distribution clause
This clause sets out the method for distributing cash among the parties.
The cash generated from [business activity] under this Agreement shall be distributed as follows: [Party 1] will receive [X]% of the total amount, and [Party 2] will receive [Y]%, with payments being made on a [monthly/quarterly] basis.
Intellectual property distribution clause
This clause governs the distribution of intellectual property rights and revenues.
The intellectual property rights and associated revenues generated by [specified intellectual property] will be distributed between the parties as follows: [Party 1] shall receive [X]% of any royalties, and [Party 2] shall receive [Y]%. Distribution will occur on a [quarterly/annual] basis.
Royalty distribution clause
This clause specifies how royalties will be distributed between the parties.
The royalties generated from the sales of [specified product/service] will be divided as follows: [Party 1] will receive [X]% of the royalties, and [Party 2] will receive [Y]%, with payments being made within [X] days of receipt of royalty payments.
Net proceeds distribution clause
This clause specifies how net proceeds from the business venture will be split.
The net proceeds from the [business activity] under this Agreement shall be distributed as follows: [Party 1] will receive [X]% of the net proceeds, and [Party 2] will receive [Y]%, after all applicable costs, expenses, and taxes are deducted.
Performance-based distribution clause
This clause ties the distribution of revenue or assets to performance metrics.
The distribution of revenues or profits under this Agreement will be based on the performance of [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% if performance targets are met, and [Party 2] will receive [Y]% if performance targets are exceeded.
Distribution of returns clause
This clause governs the sharing of returns on investments made under the Agreement.
The returns generated from the investments made under this Agreement will be distributed as follows: [Party 1] will receive [X]% of the returns, and [Party 2] will receive [Y]% of the returns, with payments being made on a [quarterly/annual] basis.
Shared revenue distribution clause
This clause sets out the terms for sharing revenue generated from joint activities.
The revenue generated from joint activities under this Agreement will be shared between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the total revenue.
Distribution of benefits clause
This clause governs the allocation of benefits under the agreement.
The benefits arising from this Agreement, including financial benefits, products, or services, will be distributed between the parties as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]%, with the distribution occurring on a [quarterly/annual] basis.
Profit allocation clause
This clause specifies how profits will be allocated between the parties.
The profits resulting from the execution of this Agreement will be allocated between the parties as follows: [Party 1] will receive [X]% of the profits, and [Party 2] will receive [Y]% of the profits after all expenses are deducted.
Distribution of assets clause
This clause sets out the terms for the distribution of physical or intangible assets.
The assets associated with this Agreement, including but not limited to [specified assets], will be distributed as follows: [Party 1] will receive [X]% of the assets, and [Party 2] will receive [Y]% of the assets, as mutually agreed by both parties.
Equity and profit distribution clause
This clause details how equity and profits are distributed among the parties.
The equity in the business will be distributed as follows: [Party 1] will hold [X]% equity, and [Party 2] will hold [Y]% equity. The profits from the business operations will be distributed in accordance with these equity shares.
Distribution of capital contributions clause
This clause specifies the distribution of capital contributions among the parties.
The capital contributions made by each party under this Agreement will be distributed as follows: [Party 1] will contribute [X]% of the capital, and [Party 2] will contribute [Y]% of the capital, with the distribution being based on these contributions.
Capital return distribution clause
This clause defines how the capital invested by each party will be returned upon liquidation or termination, based on their initial contributions.
In the event of liquidation or termination of this Agreement, the capital initially contributed by [Party 1] and [Party 2] will be returned in proportion to the percentage of their respective contributions, with [Party 1] receiving [X]% and [Party 2] receiving [Y]%.
Shared revenue from new products clause
This clause ensures that any revenue from newly developed products is shared between the parties based on the agreed percentages.
Any revenue generated from the sale of newly developed products under this Agreement will be shared as follows: [Party 1] will receive [X]% of the revenue and [Party 2] will receive [Y]%, with distribution occurring on a [monthly/quarterly] basis.
Residual income distribution clause
This clause allocates the residual income after expenses have been deducted, ensuring both parties receive their respective share.
The residual income generated after all operational and financial expenses have been deducted will be distributed between the parties as follows: [Party 1] shall receive [X]% and [Party 2] shall receive [Y]% of the net residual income.
Investment return distribution clause
This clause ensures that any returns from joint investments are equally distributed between the parties.
[Party 1] and [Party 2] agree that the returns from any joint investments made under this Agreement shall be distributed on an equal basis, with both parties receiving [X]% of the total returns, after deducting any associated fees and costs.
Revenue distribution after tax clause
This clause ensures that revenue distribution occurs after taxes and statutory deductions have been applied.
After the payment of applicable taxes and other statutory deductions, the remaining revenue generated under this Agreement will be distributed between the parties: [Party 1] will receive [X]% and [Party 2] will receive [Y]%.
Profit-sharing from service fees clause
This clause specifies how service fees collected will be shared between the parties based on the volume of services provided.
The service fees collected under this Agreement will be split between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% of the total fees and [Party 2] will receive [Y]%, based on the volume of services provided.
Bonus distribution clause
This clause defines how bonuses or incentives will be split between the parties based on performance metrics.
Any bonuses or incentives arising from the success of this Agreement will be distributed as follows: [Party 1] shall receive [X]% of the bonus, and [Party 2] will receive [Y]% based on agreed-upon performance metrics and milestones.
Revenue split for joint ventures clause
This clause determines how revenue from joint ventures will be split based on the contributions of each party.
Any revenue generated from joint ventures under this Agreement will be split between [Party 1] and [Party 2] based on their respective contributions to the venture. [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the total revenue.
Profit distribution after cost deductions clause
This clause ensures that profits are divided after operational costs, taxes, and other expenses have been deducted.
After deducting all operational costs, taxes, and expenses, the profits from [specified activity] under this Agreement will be distributed between the parties as follows: [Party 1] will receive [X]% of the profits and [Party 2] will receive [Y]%.
Income distribution based on milestones clause
This clause ensures income is distributed after achieving specific milestones, with each party receiving their agreed share.
The income generated under this Agreement will be distributed according to the achievement of specific milestones. Upon reaching each milestone, [Party 1] will receive [X]% of the total income, and [Party 2] will receive [Y]%.
Equity-based profit distribution clause
This clause distributes profits based on the equity shares held by each party, ensuring alignment with their investment.
Profits generated from this Agreement will be distributed based on the equity shares held by each party. [Party 1] will receive [X]% of the profits, and [Party 2] will receive [Y]% based on their respective equity stakes.
Commission distribution clause
This clause ensures that commissions from sales are split between the parties based on an agreed percentage.
[Party 1] and [Party 2] agree to split the commissions earned from sales under this Agreement. [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the total commission, which will be paid on a [monthly/quarterly] basis.
Asset liquidation distribution clause
This clause allocates the proceeds from the sale of assets in case of liquidation, based on the parties' initial contributions.
In the event of liquidation, the proceeds from the sale of assets related to this Agreement will be distributed as follows: [Party 1] will receive [X]% of the proceeds and [Party 2] will receive [Y]% based on their original contributions to the assets.
Sales revenue distribution clause
This clause defines how the revenue from sales of specific products or services will be split between the parties.
Any revenue generated from sales of [specific product/service] will be split between the parties as follows: [Party 1] will receive [X]% of the total sales revenue, and [Party 2] will receive [Y]%, with payments made on a [monthly/quarterly] basis.
Distributable income after expenses clause
This clause ensures that distributable income after expenses is divided between the parties based on their agreed percentage.
The distributable income, after deducting all operating expenses and costs, will be allocated between the parties as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the remaining income.
Tiered revenue distribution clause
This clause applies a tiered system to revenue distribution, ensuring that both parties benefit from increased revenue beyond a specified threshold.
Revenue generated from the sale of [specific products/services] will be distributed according to a tiered system, where [Party 1] receives [X]% of the first [$X] in revenue, and any revenue above that threshold will be split [Y]% for [Party 1] and [Z]% for [Party 2].
Distribution of residual profits clause
This clause distributes the residual profits after all costs, taxes, and liabilities have been deducted.
The residual profits from [business activity] after all costs, taxes, and liabilities are deducted will be divided between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the remaining profits.
Revenue from licensing fees distribution clause
This clause defines how revenue from licensing fees will be shared based on ownership or contribution.
Any revenue generated from licensing fees paid under this Agreement will be split between [Party 1] and [Party 2] according to their respective ownership or contribution. [Party 1] will receive [X]% of the total fees, and [Party 2] will receive [Y]%.
Gross profit distribution clause
This clause splits gross profits from the activities under the agreement based on each party’s contribution to the business.
The gross profits from the activities under this Agreement will be shared between [Party 1] and [Party 2] based on their contributions to the business. [Party 1] will receive [X]% of the gross profit, and [Party 2] will receive [Y]% after deducting all applicable costs.
Revenue share from online sales clause
This clause defines how revenue from online sales will be distributed between the parties based on an agreed percentage.
[Party 1] and [Party 2] agree that the revenue generated from online sales will be distributed on a [percentage] basis, with [Party 1] receiving [X]% and [Party 2] receiving [Y]% of the total revenue from each sale.
Discretionary bonus distribution clause
This clause splits any discretionary bonuses generated under the agreement based on performance and milestones.
The discretionary bonuses generated under this Agreement will be distributed as follows: [Party 1] will receive a bonus of [X]% of the total amount, and [Party 2] will receive [Y]%, based on individual performance and milestones achieved.
Distribution of profits in case of early termination clause
This clause determines how profits are divided if the agreement is terminated early, ensuring that both parties share in the profits earned until the termination date.
If this Agreement is terminated early, the profits generated up to the date of termination will be divided between the parties as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the total profits earned until the termination date.
Revenue distribution from joint projects clause
This clause specifies how revenue generated from joint projects will be split, ensuring an equal distribution of profits.
Any revenue generated from joint projects under this Agreement will be distributed equally between [Party 1] and [Party 2], with each party receiving [X]% of the total revenue after all project-related expenses are deducted.
Realized gains distribution clause
This clause defines how realized gains from investments or assets will be split between the parties, ensuring fairness in the division of profits.
Any realized gains from investments, assets, or business activities under this Agreement will be distributed as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the total gains after taxes and deductions.
Profit distribution based on sales targets clause
This clause defines how profits from sales will be divided based on the achievement of specific sales targets.
The profits derived from the achievement of sales targets will be shared between the parties, with [Party 1] receiving [X]% of the profit for reaching the target, and [Party 2] receiving [Y]% of the profit after the target is surpassed.
Quarterly profit-sharing distribution clause
This clause divides profits each quarter, ensuring a regular distribution of earnings between the parties.
Profits generated each quarter from [specified business activity] will be distributed as follows: [Party 1] will receive [X]% of the total profits, and [Party 2] will
receive [Y]%, with payments made at the end of each quarter.
Distribution of profits from secondary products clause
This clause specifies how revenue and profits from secondary products will be split based on each party’s role in the development and marketing of the products.
Revenue and profits from secondary products launched under this Agreement will be divided between the parties as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% based on their involvement in developing and marketing the products.
Revenue distribution after tax clause
This clause ensures that revenue after tax obligations are fulfilled is split between the parties in a fair and agreed-upon manner.
After accounting for taxes, the revenue from the [specified business activity] will be split between the parties as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% after tax obligations are fulfilled.
Commission-based distribution clause
This clause defines how commissions earned from sales or services will be distributed between the parties.
The commission generated from sales or services rendered under this Agreement will be distributed as follows: [Party 1] will receive [X]% of the total commission earned, and [Party 2] will receive [Y]% of the total commission, with payments being made on a [monthly/quarterly] basis.
Excess revenue distribution clause
This clause defines how any revenue beyond the agreed minimum will be split between the parties, ensuring fairness in revenue distribution.
Any excess revenue beyond the agreed-upon minimum amount will be distributed between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% of the excess revenue, and [Party 2] will receive [Y]%, with payments made within [X] days of the excess revenue being realized.
Expense-sharing distribution clause
This clause ensures that costs and expenses are shared fairly between the parties in the performance of the agreement.
The costs and expenses associated with the performance of this Agreement shall be shared between the parties as follows: [Party 1] will bear [X]% of the total expenses, and [Party 2] will bear [Y]%, with adjustments made at the end of each quarter.
Fixed payment distribution clause
This clause ensures that fixed payments are made to the parties in the agreed percentages.
[Party 1] and [Party 2] agree to receive fixed payments under this Agreement, with [Party 1] receiving [X]% and [Party 2] receiving [Y]% of the fixed payment amount, distributed quarterly.
Revenue distribution for each contract clause
This clause specifies how revenue generated from each contract or service will be split between the parties.
Revenue generated from each contract or service performed under this Agreement will be distributed between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]%, with payments made immediately after contract fulfillment.
Milestone-based profit distribution clause
This clause ties profit distribution to the achievement of specific milestones, ensuring both parties are compensated as they meet project goals.
Profit distributions under this Agreement will be made based on milestone achievement. Upon reaching each milestone, [Party 1] will receive [X]% and [Party 2] will receive [Y]% of the profits related to that milestone.
Net income distribution clause
This clause splits the net income generated after all taxes and expenses between the parties.
Net income generated from [specified business activity] will be distributed as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% after all taxes, deductions, and expenses are accounted for.
Revenue allocation clause
This clause allocates revenue generated from joint ventures according to the parties' contributions.
Revenue generated from the joint venture will be allocated between the parties based on their agreed-upon contributions, with [Party 1] receiving [X]% and [Party 2] receiving [Y]% of the total revenue generated, to be distributed quarterly.
Asset liquidation proceeds distribution clause
This clause specifies how the proceeds from asset liquidation will be divided between the parties.
In the event of asset liquidation under this Agreement, the proceeds from the sale will be distributed between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% of the proceeds, and [Party 2] will receive [Y]%.
Post-expenses revenue distribution clause
This clause ensures that the revenue, after all necessary expenses are deducted, is split between the parties.
After accounting for all necessary expenses and deductions, the remaining revenue generated under this Agreement will be distributed between the parties as follows: [Party 1] will receive [X]% of the net revenue, and [Party 2] will receive [Y]% of the net revenue.
Royalty payments distribution clause
This clause defines how royalties generated from the use of intellectual property will be distributed between the parties.
Royalties generated from the use of [specified intellectual property, products, or services] will be distributed as follows: [Party 1] will receive [X]% of the total royalties, and [Party 2] will receive [Y]% of the royalties, with payments made on a [quarterly/annual] basis.
Joint project income distribution clause
This clause allocates the income from joint projects based on contributions made by the parties.
Any income generated from joint projects under this Agreement will be distributed between the parties as follows: [Party 1] will receive [X]% of the total income, and [Party 2] will receive [Y]%, with periodic distributions made as the project progresses.
License fee revenue distribution clause
This clause ensures the fair division of licensing fee revenue according to the contributions or ownership of the parties.
License fees earned from the licensing of [specified products, services, or intellectual property] will be shared between [Party 1] and [Party 2] as follows: [Party 1] will receive [X]% of the total license fee revenue, and [Party 2] will receive [Y]%.
Gross profit distribution clause
This clause defines how the gross profits will be divided between the parties after deducting applicable costs.
The gross profits from the activities under this Agreement will be split between the parties as follows: [Party 1] will receive [X]% of the gross profits, and [Party 2] will receive [Y]%, with payments made at the end of each fiscal quarter.
Milestone payment distribution clause
This clause defines how the payments based on achieving milestones will be distributed between the parties.
Payments based on the achievement of milestones under this Agreement will be distributed as follows: [Party 1] will receive [X]% and [Party 2] will receive [Y]% upon completion of each milestone.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.