Net Income and Loss Clause Samples
The Net Income and Loss clause defines how the profits and losses of a business or partnership are calculated and allocated among its members or partners. Typically, this clause outlines the method for determining net income or loss, such as by referencing generally accepted accounting principles, and specifies the proportion or formula by which each party receives their share. Its core practical function is to ensure transparency and fairness in the distribution of financial results, preventing disputes by clearly establishing how financial outcomes are shared.
Net Income and Loss. Net Income and Net Loss shall be allocated to the Partners in accordance with their respective Capital Percentages.
Net Income and Loss. (a) Except as otherwise provided in this Article 5, Net Income, if any, for any allocation period shall be allocated in the following priority:
(i) First, to the Partners in proportion to, to the extent of, and in reverse order of the cumulative amount of Net Losses allocated to each such Partner under Section 5.3(b)(iii), and not previously offset pursuant to this Section 5.3(a)(i);
(ii) Second, 100% to the Partners to the extent of and in proportion to each such Partner's Unallocated Preferred Return; and
(iii) Thereafter, 60% to BIT Partner and 40% to Sponsor Partner.
(b) For each allocation period, except as otherwise provided in this Article 5, Net Losses shall be allocated to the Partners as follows:
(i) First, to the Partners in proportion to, to the extent of, and in reverse order of the cumulative amount of Net Income allocated to each such Partner pursuant to Section 5.3(a)(iii), and not previously offset pursuant to this Section 5.3(b)(i);
(ii) Second, 100% to the Partners in proportion to, to the extent of, and in reverse order of the cumulative amount of Net Income allocated to each such Partner pursuant to Section 5.3(a)(ii) and not previously offset by this Section 5.3(b)(ii); and
(iii) Thereafter, 60% to BIT Partner and 40% to Sponsor Partner.
Net Income and Loss. The net income of this Cooperative in excess of dividends on equity capital and additions to reserves shall be distributed to members and nonmember patrons annually or more often on the basis of patronage. The records of this Cooperative may show the interest of members and equity holders in the reserves. Net income may be accounted for and distributed on the basis of allocation units that may be functional, divisional, departmental, geographic, or otherwise. Net income may be distributed in cash, allocated patronage equities (including without limitation patrons equities), revolving fund certificates, securities of this Cooperative, other securities, or any combination thereof. Any such allocated equity shall be redeemable only at the option of the Board. The net loss of an allocation unit or allocation units may be offset against the net income of other allocation units to the extent permitted by applicable law. The foregoing provisions of this Article V shall be implemented as more particularly provided in the Bylaws.
Net Income and Loss. Borrower shall on a consolidated basis (i) maintain a positive Net Income on a fiscal year basis for all fiscal years after the year ending September 30, 2002, (ii) commencing with the two fiscal quarters ending March 31, 2003, not have two consecutive fiscal quarters in which it has net losses that total in excess of $500,000 and (iii) commencing with the four fiscal quarters ending September 30, 2003, not have four consecutive fiscal quarters in which it has net losses that total in excess of $800,000. In addition, the maximum quarterly loss, before taxes, without giving effect to any tax benefits and excluding the Q.S.R. Consulting Expense, shall not exceed $1,200,000, and the maximum loss, before taxes, without giving effect to any tax benefit and excluding the Q.S.R. Consulting Expense, shall not exceed $2,100,000 at any time during year ending September 30, 2002.