A profit sharing plan is a type of qualified retirement plan for employees that is initiated and maintained by a business-owner. In a profit sharing plan, employees as well as any of their beneficiaries are allowed to partake in the profits of the business. Using this kind of a benefit plan is good for both employees and their employers, especially if the business in question is still in its early stages of development. If a person has just started a business, a large portion of resources need to be dedicated to ensuring the consistent quality of whatever good or service is being offered rather than on extensive employee benefits, so this is a good way to still have an incentive for workers.
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