Special Profits Allocation Sample Clauses
The Special Profits Allocation clause defines how certain profits, often arising from specific transactions or events, are distributed among the parties involved in an agreement. Typically, this clause outlines the criteria for identifying special profits, such as gains from asset sales or extraordinary income, and specifies the method or formula for allocating these profits, which may differ from the standard profit-sharing arrangement. Its core function is to ensure that unique or exceptional profits are distributed fairly and transparently, preventing disputes and clarifying expectations among the parties.
Special Profits Allocation. If the Company incurs Profits at any time when the Members’ Adjusted Capital Account Balances are less than zero and the hypothetical liquidation described in Section 4.1(b) would not result in any distributions to the Members, Profits shall be allocated to the Members in proportion to their negative Adjusted Capital Account Balances, until such negative balances have been eliminated.