Profit Allocation
/ˈprɒfɪt ˌæləˈkeɪʃən/
Definitions
- (n.) The legal process or mechanism by which profits generated by a business or contractual relationship are distributed among parties entitled to share in them.
The partnership agreement detailed the profit allocation among its members.
- (n.) The method used in tax law to attribute profits of multinational enterprises to different jurisdictions for tax purposes.
Transfer pricing rules affect the profit allocation between related companies in different countries.
Forms
- profit allocation
- profit allocations
Related terms
See also
Commentary
Profit allocation clauses should be drafted clearly to avoid disputes over entitlement and tax implications.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.