<p>Retained profits, or retained earnings are profits that a firm has earned to date (after deducting dividends or other distributions paid out to investors) and are retained in the company's accounts. In a <a href="https://www.goforma.com/small-business-accounting/what-is-balance-sheet-profit-loss" target="_blank">balance sheet</a>, retained profits are included under the owner's equity section.</p>
Small Business Accountants
What is Retained Profit?
Retained profit, also called retained earnings, is a UK limited company's cumulative post-tax profit that has not been paid out as dividends. It sits in shareholders' equity on the balance sheet and represents funds reinvested in the business. Distributable retained profit sets the ceiling on how much a company can lawfully declare in dividends under section 836 of the Companies Act 2006.
