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May 27, 2020
4:50:02pm
mkg Playmaker
I would probably do it via an informal arrangement/bonu
bonus structure for most small businesses. A formal profit sharing plan can become a headache for the employer unless it is carefully created and you have someone who is very knowledgeable about it running it for you. By keeping it as an informal bonus structure, you decide when and how much to give and you can adjust it whenever you want. Plus you don't have the "discrimination" and other issues to worry about that would come with a formal plan. There's some tax differences between then two approaches potentially, so talk to your tax people before doing anything. But, personally, I'd keep it informal and subject to your discretion to adjust/change. I don't feel that formal profit sharing plans really provide any long-term incentives to key employees to stick around. But, that's just my personal belief/preference.
mkg
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mkg
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