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A company split agreement is a legal document used to divide a single business entity into two separate companies. This can occur for many reasons, such as when a company wishes to split its operations into distinct business units or when two or more partners want to divide a business.

The agreement outlines the terms of the split, including the assets, liabilities, and ownership interests of the two new companies. It also establishes how the split will occur and how any disputes will be resolved.

A company split agreement is essential in ensuring that the split goes smoothly and that both new companies are able to operate independently without any legal issues. The agreement should be drafted by experienced legal professionals and signed by all parties involved in the split.

One of the most important sections of the agreement is the division of assets. This includes the allocation of tangible assets, such as property and equipment, as well as intangible assets, such as intellectual property and customer relationships. The agreement should also address the distribution of liabilities, including outstanding debts and legal obligations.

Another crucial component of the agreement is the ownership structure of the new companies. This includes the number and percentage of shares held by each party, as well as any restrictions or conditions placed on the ownership interests.

In addition, the agreement should establish how the two new companies will operate going forward. This may include provisions related to management structure, decision-making processes, and financial responsibilities.

It is important for all parties involved in a company split to understand the terms of the agreement and to be on the same page about their respective roles and responsibilities. A well-drafted company split agreement can help prevent disputes and legal issues down the line and ensure a successful transition for both new companies.