Legal Definitions - surplus profit

Surplus profit is the extra money a business makes after paying all its expenses. It is also called undivided profit or accumulated profit. This profit has not been distributed to the owners or shareholders of the business yet. Some jurisdictions only allow dividends to be paid from surplus profit.

For example, if a company makes $100,000 in revenue and spends $80,000 on expenses, the surplus profit would be $20,000.

Another type of profit is gross profit, which is the total sales revenue minus the cost of goods sold. Net profit is the total sales revenue minus all expenses. Operating profit is the total sales revenue minus all operating expenses.

There are also profits related to land ownership, such as profit à prendre, which is the right to take something from the land, like minerals or timber. A profit can be appurtenant, which means it benefits a specific piece of land, or in gross, which means it can be exercised independently of land ownership.

For example, a farmer may have a profit appurtenant to their land that allows them to graze their cattle on a neighboring piece of land. Or, a mining company may have a profit à prendre to extract minerals from a specific area of land.