The Concept of Profit Distribution

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Introduction Profit distribution is a term which refers to the allocation of profits to various categories of stakeholders such as owners and stockholders or for various purposes such as investment and research. It is important for each and every organization to come up with a perfect profit distribution policy that would effectively aid in the process of internal management of the firm. In this paper, we conduct a thorough research on the various types of profit distribution techniques/formulas with a presentation of a case study to highlight the merits of having a profit distribution policy in place in every organization. The role of profit distribution in the internal management of companies is therefore explored in our dissertation. Profit distribution in an LLC The concept of profit distribution is quite a complex one. It is an important issue since it has a direct influence on the stability and efficiency of every business enterprise (Li & Dan 156).Several people have felt that the distribution of profits in LLC should be done on the basis of the percentage of shares held by individual members. This is however not always the case. The exact method used in the distribution of profits is however supposed to be clearly outlined in the operating agreement. There is however a standard method that is utilized in the distribution of profits. The standard method of profit distribution In most instances, the owners of a given limited liability company will have their

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