The most important feature of such corporations is that they work for the benefit of the people and the society. They put the needs and the welfare of the people as well as the society above their own personal needs.
These corporations do not work to earn profits, but their main objective is to develop the society through charity, providing food, education or through religious means.
The money received from donations, campaigns, investments or other means are never distributed among members if even there is surplus amount of money. The money is always used for the objective of the not-for-profit organization, which is the welfare of the people and the society.
These corporations are managed by elected members or the founder members of the corporations. The position in such corporations depend upon the work done by the person towards achieving the goals of the corporation.
While the money in the not-for-profit corporations is not used for their own welfare, certain staff can be employed for specialized work and can be paid for the same.
Difference between non-profit and not-for-profit corporations
People usually get confused between non-profit and not-for-profit organizations and the key differences between them should be understood to avoid any confusion. The key differences between the non-profit and not-for-profit corporations are
Non-profit corporations can be formulated as a separate single entity while not-for-profit corporations cannot be formulated as a separate single entity.
Non-profits work with the objective of earning profits. However, the profits are not utilized for any memberâ€™s welfare. Not-for-profit corporations do not work for objective of earning profits.
Non-profits can have paid employees and the money for paying the employees comes through fund-raising. However, the member of not-for-profit corporations are volunteers.
Types of not-for-profit corporations
A not-for-corporation can be formulated by the members of the corporation in various different ways and can be of numerous types such as
If a corporation is formulated with the objective of assisting those in need, then the corporation is deemed as charitable.
Private foundations are a type of corporations which do not work for the welfare of the society directly but rather indirectly, they fund other organizations that work for the welfare of the society. The money for funding the organizations is contributed majorly by the members of the foundation.
Not-for-profit auxiliary organizations
These corporations are formulated to support the primary organizations, which works for the welfare of the society.
Charitable Unincorporated Association
This form of corporation is a membership corporation such that the members of the corporation can play any roles in order to work for the welfare of the society.
Community interest company
A non-charitable corporation that is working for the welfare of the society such that the assets of the company are being utilized to assist those in need is known as a community interest company.
Community benefit society
Such a corporation is owned by the members that control the corporation. The corporation works only for the welfare of the society, the profits earned are also used for the same objective.
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