Based on Equity Contribution

• Profits are shared in proportion to capital invested
  
• Higher equity holders receive a larger share of profits
  
• Equity ratio is defined in the joint venture agreement
  
• Reflects the financial risk taken by each partner
  
• Commonly incorporated joint ventures
  

As Per the Contractual Agreement

• Partners can agree on any profit-sharing ratio
  
• Not limited to capital contribution or ownership
  
• Terms are clearly outlined in the joint venture contract
  
• Can be based on efforts, resources, or technology shared
  
• Offers flexibility in structuring the arrangement
  

Performance-Linked Sharing

• Profit share may depend on performance benchmarks
  
• Partners meeting targets receive greater profit portions
  
• Encourages accountability and productivity
  
• Can include milestones, deliverables, or KPIs
  
• Suitable for results-driven ventures
  

Revenue and Expense Allocation

• Joint ventures may define specific revenue-sharing models
  
• Each partner may bear or recover specific costs
  
• Net profit is calculated after deducting shared expenses
  
• Allocation models are fixed in advance
  
• Ensures clarity in financial settlements
  

Mutual Negotiation and Review

• Profit-sharing terms are agreed upon through negotiation
  
• Periodic reviews may adjust the ratios over time
  
• Renegotiation is allowed if agreed by all partners
  
• Reflects changes in investment, roles, or contributions
  
• Maintains fairness throughout the venture’s lifecycle