The Small Business Management Agreement is a crucial document for Filipino small business owners seeking to delegate operational management to professional service providers. This agreement is particularly relevant in the Philippine business context where small and medium enterprises (SMEs) form a significant portion of the economy. It is designed to comply with Philippine corporate and business laws, including the Corporation Code and the Micro, Small and Medium Enterprise Development Act. The document outlines comprehensive terms for management services, including operational control, decision-making authority, financial management, and reporting obligations. It serves as a vital tool for business owners looking to professionalize their operations while maintaining appropriate oversight and control mechanisms. The agreement is especially useful for businesses experiencing growth, seeking professional management expertise, or implementing succession planning.
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1. Parties: Identifies and provides full details of the business owner(s) and the management company/individual, including registration numbers and addresses
2. Background: Explains the context of the agreement, including brief description of the business and the reason for engaging management services
3. Definitions: Defines key terms used throughout the agreement, including technical, financial, and operational terms
4. Scope of Management Services: Detailed outline of the management services to be provided, including operational, financial, and administrative responsibilities
5. Term and Renewal: Specifies the duration of the agreement and conditions for renewal or extension
6. Management Authority and Limitations: Clearly defines the extent and limitations of management's decision-making authority
7. Compensation and Payment Terms: Details the management fees, payment schedule, and any performance-based compensation
8. Reporting and Accountability: Outlines reporting requirements, frequency of updates, and performance metrics
9. Confidentiality and Data Protection: Specifies obligations regarding business information and compliance with data protection laws
10. Termination: Details the circumstances and procedures for ending the agreement
11. Governing Law and Dispute Resolution: Specifies Philippine law as governing law and outlines dispute resolution procedures
12. General Provisions: Standard clauses including notices, amendments, and severability
1. Employee Management: Include when management services involve human resources responsibilities
2. Intellectual Property Rights: Include when management involves creation or handling of intellectual property
3. Insurance Requirements: Include when specific insurance coverage is required for management activities
4. Non-Competition: Include when restricting management from working with competing businesses
5. Force Majeure: Include when parties want specific provisions for unforeseeable circumstances
6. Assignment and Succession: Include when transfer of management rights needs to be addressed
7. Compliance with Industry Regulations: Include for businesses in regulated industries
1. Schedule A - Services Description: Detailed breakdown of management services and responsibilities
2. Schedule B - Fee Structure: Detailed breakdown of management fees, including any variable components
3. Schedule C - Performance Metrics: Specific KPIs and performance evaluation criteria
4. Schedule D - Reporting Templates: Standard formats for required management reports
5. Schedule E - Operational Guidelines: Specific procedures and policies for business operations
6. Appendix 1 - Required Qualifications: List of required qualifications for key management personnel
7. Appendix 2 - Emergency Procedures: Procedures for handling emergency situations
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