eBay Inc. announced last September that it would spin off subsidiary PayPal in 2015 to form two publicly traded companies: eBay Inc. and PayPal Holdings Inc. A U.S. Securities and Exchange Commission (SEC) filling released yesterday by eBay has revealed some of the terms of the proposed separation.

The split is due to happen later this year with no specific date being given. Post-split it appears it will be business as usual for both companies, with some caveats.

The operating agreement, which is valid for six years, including a one-year transition period, requires that PayPal continue to offer eBay merchants the same rates its does currently. If PayPal strikes deals at lower rates with other ecommerce companies, such as Amazon or Alibaba, it has to extend those lower rates to eBay merchants as well.

The upside for PayPal here is that it will be free to pursue business with eBay’s rivals; something it has been unable to do.

PayPal, under the agreement, will pay eBay an ongoing fee for business eBay drummed up for it over the years as a recommended payment provider for its merchants.

eBay has committed to driving 80 percent of online payments on its platform via PayPal, much like it does today. If that share drops below 80 percent, eBay will pay PayPal a fee based on a sliding scale and, if the reverse happens, PayPal will pay eBay a fee for all transactions above the 80 percent mark.

While PayPal is now free to engage eBay’s competitors, the two companies have agreed to not directly compete with each other. That means PayPal cannot start its own marketplace and eBay cannot start its own payments provider for the period of the agreement. If, however, PayPal is bought by an eBay rival, eBay will be free to do as it pleases after 18 months.

The companies have also left the door open to collaborate on future products and will continue to share security and fraud-related data. They will not share data for marketing purposes.

There will be some changes in leadership at both companies. eBay Chief Executive John Donahoe will step down and become chairman of PayPal. Bob Swan, eBay chief financial officer, will also step down, but will join the eBay board. eBay founder Pierre Omidyar will have a seat on the boards of both companies and eBay director Tom Tierney will become chairman of the board.

The terms of the separation is pending SEC approval.

Photo Credit: Kārlis Dambrāns | Flickr