Definition of Net profits interest

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TeachMeFinance.com - explain Net profits interest



Net profits interest -- A contractual arrangement under which the beneficiary, in exchange for consideration paid, receives a stated percentage of the net profits. That type of arrangement is considered a nonoperating interest, as distinguished from a working interest, because it does not involve the rights and obligations of operating a mineral property (costs of exploration, development, and operation). The net profits interest does not bear any part of net losses.




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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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