Profit Sharing
/ˈprɒfɪt ˌʃɛərɪŋ/
Definitions
- (n.) A system by which employees or stakeholders receive a share of a company's profits, often as an incentive or bonus.
The company implemented profit sharing to motivate its employees.
- (n.) A contractual arrangement in partnerships or joint ventures where profits are distributed among parties according to agreed terms.
The partners agreed on profit sharing based on their initial capital contributions.
Forms
- profit sharing
Related terms
See also
Commentary
Profit sharing plans may have tax and regulatory implications and should be clearly defined in agreements to avoid disputes.
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.