Are e-signatures legally enforceable?

Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes adopted in most states; ensure intent, consent, attribution, and retention are documented.

When is notarization required?

Not typically required for carry agreements, but state-specific formalities or investor requirements may demand notarization or witnessing; check governing-law clauses and investor agreements.

Do I need a paper copy?

No, if you retain an accurate electronic record that can be reproduced and meets ESIGN/UETA criteria; keep signed PDF and audit trail for audits and tax filings.

How to correct a signed agreement?

Execute a written amendment signed by authorized parties; avoid unilateral edits to executed PDFs. Record amendment date, scope, and signatures.

What if a signer used a different legal name?

Mismatched names can delay enforcement and tax reporting. Prepare a corrective affidavit or amendment and obtain updated identification or notarized confirmation.

How long should records be kept?

Retain for at least 3 years for IRS purposes and longer for possible contractual claims; industry- or state-specific rules (e.g., HIPAA, SEC) may require extended retention.

Electronic Signature
Templates
Finance
Financial Carry Agreement

Financial Carry Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

FINANCIAL CARRY AGREEMENT

This Financial Carry Agreement (the Agreement) is entered into as of (Agreement Date), by and between:

Carrying Party

Carrying Party: Carrying Party Address: Contact Phone: Contact Email:

Beneficiary

Beneficiary (Recipient): Beneficiary Address: Contact Phone: Contact Email:

RECITALS

WHEREAS, the Carrying Party agrees to provide funding to the Beneficiary for the Project or transaction described below, and the parties desire to set forth the terms by which the Carrying Party will be entitled to a carried interest, reimbursement of capital, interest, and other payments as provided herein.

1. DEFINITIONS

Capitalized terms used in this Agreement shall have the meanings set forth below. "Principal" means the aggregate funding committed by the Carrying Party in the amount of USD. "Carry Percentage" means of Net Profits as described in Section 4. "Interest Rate" means an annual rate of .

2. PURPOSE, FUNDING AND DISBURSEMENT

2.1 Funding. The Carrying Party will advance the Principal to the Beneficiary for use in connection with:

2.2 Disbursement Schedule. Disbursements shall be made in accordance with the schedule below:

Disbursement Date	Amount (USD)	Purpose

3. INTEREST, FEES AND PAYMENT TERMS

3.1 Interest Accrual. Interest shall accrue on outstanding Principal at the Interest Rate calculated on a 365-day year basis and payable as set forth below.

3.2 Payment; Maturity. The Principal and accrued but unpaid interest shall be due and payable in full on or before (Maturity Date), unless earlier repaid.

3.3 Prepayment. Prepayment is: allowed prohibited (select applicable).

4. CARRY, DISTRIBUTIONS AND WATERFALL

4.1 Calculation of Net Profits. Net Profits means Gross Proceeds from the Project less (a) return of contributed capital to the Carrying Party and any other investors, (b) Transaction Costs and reasonable expenses, and (c) repayment of outstanding debt.

4.2 Priority of Payments and Waterfall. Distributions shall be made in the following order: (a) return of capital to the Carrying Party until the Principal has been repaid in full; (b) payment of accrued interest to the Carrying Party; (c) payment of the Preferred Return to the Carrying Party of ; and (d) payment of Carry to the Carrying Party equal to of Net Profits thereafter.

4.3 Timing of Distributions. Distributions of realized proceeds shall be made within days following receipt of such proceeds by the Beneficiary.

5. SECURITY; SET-OFF

5.1 Security. The obligation of the Beneficiary to repay Principal and pay amounts due under this Agreement shall be: secured unsecured (select applicable). If secured, specify collateral:

6. DEFAULT; REMEDIES

6.1 Events of Default. The following constitute Events of Default: failure to pay Principal or interest when due; material breach of this Agreement; insolvency; assignment for the benefit of creditors; or any representation or warranty being materially untrue.

6.2 Remedies. Upon an Event of Default and expiration of any applicable cure period of days, the Carrying Party may declare all amounts immediately due and payable, enforce any security, charge default interest at an additional per annum, and pursue any other remedies available at law or equity.

7. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants that it has full power and authority to enter into this Agreement, that the execution and delivery of this Agreement has been duly authorized, and that this Agreement constitutes a valid and binding obligation enforceable in accordance with its terms.

8. TAXES, EXPENSES AND FEES

All fees, costs and expenses incurred by the Carrying Party in connection with the preparation, negotiation, enforcement and administration of this Agreement (including reasonable legal fees) shall be reimbursed by the Beneficiary within thirty (30) days of invoice. Each party shall bear its own tax obligations unless otherwise required by applicable law.

9. NOTICES

All notices required or permitted hereunder shall be in writing and delivered to the addresses set forth below or to such other addresses as a party may designate by written notice. Notices shall be effective upon receipt.

Notice to Carrying Party: Notice to Beneficiary:

10. CONFIDENTIALITY

The parties shall keep confidential all non-public information received in connection with this Agreement and shall not disclose such information except as required by law, regulation, or with the prior written consent of the disclosing party.

11. MISCELLANEOUS

11.1 Assignment. Neither party may assign this Agreement without the prior written consent of the other, except that the Carrying Party may assign to an affiliate or to a purchaser of its rights in accordance with applicable law.

11.2 Amendment. This Agreement may be amended only by a written instrument executed by both parties.

11.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction of without regard to choice of law principles.

11.4 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

ADDITIONAL TERMS

Special Provisions / Notes:

EXECUTION

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

Carrying Party — Printed Name:

By:

Date:

Beneficiary — Printed Name:

By:

Date:

What a Financial Carry Agreement Covers

A Financial Carry Agreement formalizes how carried interest (the manager's share of profits) is allocated, calculated, and paid among fund managers and investors. It defines the waterfall structure, hurdle rate, catch-up mechanisms, vesting schedules, clawback provisions, tax allocation, and timing of distributions. The agreement clarifies roles (general partner, limited partners), reporting obligations, and dispute-resolution processes. For funds and joint ventures, it reduces ambiguity about profit splits and timing, and sets clear rules for adjustments, tax treatment, and post-termination obligations.

Why a Clear Carry Agreement Matters

A well-drafted Financial Carry Agreement minimizes disputes, aligns incentives, and ensures consistent treatment of profits and taxes for all parties. It creates predictable distribution mechanics and documents governance for future audits or regulatory review.

Who Typically Prepares and Signs This Agreement

The Financial Carry Agreement is most commonly used by private equity and investment fund participants, their counsel, and finance teams when establishing profit-sharing mechanics.

Private equity fund managers and general partners who set carry percentages and waterfall mechanics for the fund.
Limited partners and institutional investors reviewing distribution priorities, tax allocations, and clawback protections.
Fund accountants, tax advisers, and outside counsel who prepare, review, and monitor compliance with the agreement.

Use the agreement when forming a fund, onboarding new partners, revising carry mechanics, or resolving distribution disputes.

Core Elements to Include in the Agreement

A professional Financial Carry Agreement explicitly defines each calculation and condition that affects carried interest, reducing ambiguity and compliance risk.

Waterfall Structure

Specify the sequence for distributions (return of capital, preferred return/hurdle, catch-up, carried interest) and provide worked examples for different exit scenarios.

Carry Percentage

State the percentage allocated to the general partner or managers, note whether it is applied on realized gains, committed capital, or another base, and define rounding rules.

Hurdle Rate

Define the preferred return threshold, how it accrues (simple vs compound), and whether it is applied fund-wide or on a deal-by-deal basis.

Clawback and True-Up

Include post-distribution true-up mechanisms for overpaid carry, timelines for clawback, and processes for recovering amounts from managers if necessary.

Tax Allocation

Allocate income, gain, loss, and tax liabilities among partners, and specify how K-1s or equivalent tax statements will be prepared and delivered.

Vesting and Forfeiture

Set vesting schedules, milestones, and conditions under which a manager's carried interest can be forfeited or transferred.

Step-by-Step: Completing and Executing the Agreement

Follow a clear sequence from draft to execution to ensure accuracy and enforceability.

01

Draft: Prepare terms, waterfall, and tax language with counsel input.
02

Review: Circulate to partners and advisors for comment and redlines.
03

Approve: Obtain formal sign-off from authorized signatories.
04

Execute: Sign with electronic or wet signatures and retain the signed record.

Digital Workflow Settings to Use When Sending the Agreement

Configure an audit-friendly signing workflow to capture identity, consent, and retention requirements for e-signatures.

Field	Configuration
Signing Order	Sequential or parallel routing depending on approval needs
Authentication	Email link plus optional SMS or knowledge-based checks
Conditional Fields	Use conditional visibility for optional clauses or signature blocks
Retention Setting	Enable automatic export and secure storage of signed PDF and audit trail

How Electronic Execution Typically Works

A standardized e-signing flow reduces signer friction while preserving legal evidence for intent and attribution.

Upload Document: Place signature, initial, and date fields on the agreement.
Add Signers: Enter signer emails and assign roles or signing order.
Send for Signature: Dispatch via secure link with authentication options.
Record Completion: Store signed PDF with audit trail showing timestamp and IP.

Technical Considerations for eSigning and Storage

Choose a platform that records signer identity, provides an audit trail, and secures documents in transit and at rest.

Integrations: Link with CRM, accounting, or document management systems
File Types: Support for PDF, DOCX, and export to PDF/A
Authentication: Offer email, SMS, or stronger signer verification options

Ensure the chosen platform supports long-term retention, audit exports, and secure role-based access for fund administrators and auditors.

Security and Compliance Features to Verify

Encryption: TLS 1.2/1.3, AES-256 at rest

Audit Trail: Comprehensive event log, IP, timestamp

Certifications: SOC 2 Type II, ISO 27001

Regulatory: ESIGN and UETA compliance

Healthcare BAA: HIPAA available (BAA required)

FDA/Records: 21 CFR Part 11 support

Primary Risks of an Incorrect or Incomplete Agreement

Tax Exposure: Incorrect allocations

Clawback Liability: Overpaid carry recovery

Enforcement Problems: Ambiguous terms

Invalid Signatures: Missing consent or audit trail

Investor Disputes: Unclear reporting or timing

Regulatory Review: Insufficient retention

Common Preparation Mistakes to Avoid

Vague waterfall language that lacks worked numerical examples
Failing to specify rounding rules and currency handling
Using inconsistent legal names for parties across schedules
Omitting tax allocation mechanics and reporting responsibilities

Selected eSignature Vendors and Pricing Overview

Comparison of common eSignature vendors and key plan characteristics relevant to executing Financial Carry Agreements; signNow is listed first per comparison format.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes (Business Premium)	Yes	Yes	Yes	Yes
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes (BAA required)	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Real-World Examples of Using eSignatures for Agreements

Practitioners use eSignature platforms to speed approvals, maintain compliance records, and support integrations with accounting systems.

Optica Ventures

Optica Ventures streamlined external signings with a simple interface for partners

"The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers."
The result was faster turnaround from negotiation to execution and fewer manual follow-ups for signed agreements.

BIS

BIS prioritized security and compliance when moving documents online

"We felt most comfortable with airSlate SignNow given their SOC 2 certification and strict focus on ESIGN and UETA act compliance."
They achieved centralized audit trails and consistent retention for fund documents and participant records.

FAQs and Common Execution Questions

Answers to frequent questions about enforceability, signatures, and post-signature handling for Financial Carry Agreements.

Need help? Contact support

Are e-signatures legally enforceable?
Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes adopted in most states; ensure intent, consent, attribution, and retention are documented.
When is notarization required?
Not typically required for carry agreements, but state-specific formalities or investor requirements may demand notarization or witnessing; check governing-law clauses and investor agreements.
Do I need a paper copy?
No, if you retain an accurate electronic record that can be reproduced and meets ESIGN/UETA criteria; keep signed PDF and audit trail for audits and tax filings.
How to correct a signed agreement?
Execute a written amendment signed by authorized parties; avoid unilateral edits to executed PDFs. Record amendment date, scope, and signatures.
What if a signer used a different legal name?
Mismatched names can delay enforcement and tax reporting. Prepare a corrective affidavit or amendment and obtain updated identification or notarized confirmation.
How long should records be kept?
Retain for at least 3 years for IRS purposes and longer for possible contractual claims; industry- or state-specific rules (e.g., HIPAA, SEC) may require extended retention.

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