What is Non Profit Organization? Basically, a non-profit organization, also called a not-for-profit corporation, not-for- profit organization, or even nonprofit organization, is an official entity legally set up and run for a public, private or social advantage, as against an individual business or corporation that practices profit making. Non-profit organizations can be established for any purpose. However, the most common reason for establishing such associations is to further the social cause of a particular group, issue or organization. Another very important reason is to protect the rights of the citizens from exploitation by other people or companies.
How does a not-for-profit corporation or not-for- profit organization differ from a sole proprietorship or corporation? A sole proprietor is one who owns only a single asset – a physical plant and machinery, land and buildings. He does not own any assets other than his physical assets. He is allowed to run his business and gain profits as he sees fit. However, he cannot participate in any way in the management of his firm, nor can he hire employees, engage in trade, receive loans or other forms of credit from anyone or his friends or relatives.
A sole proprietorship, as well as any other kind of business, are characterized by its profit or loss. A not for profit organization is characterized by its income, profits and value. As opposed to a sole proprietorship, which can exist only for a short time (as soon as the person becomes its owner), a not for profit organization can exist for as long as it takes. However, a not-for- profit corporation normally limits its activities to its profit making capacity. So, what is a non-profit organization?
Non profit sharing is a way of sharing out the profits of a business without having to give up ownership of the whole business. By participating in profit sharing programs, shareholders can choose to keep some or all of the profit that the program generates. In return, the company lets them keep part or all of the losses that occur in the process. It is considered a form of mutual benefit, wherein both sides reap benefits without having to give up ownership or control of the business.
There are several ways by which profit sharing can be carried out. The most common is through dividend payment, in which the company’s senior management divide the profit between the shareholders. There is also a profit sharing program wherein the shareholders are given shares of the profits of the company on a regular basis. Sometimes, the company allows the members to participate in the management of the business, receiving a percentage of the company’s profit each year.
How much profit is distributed among the members will depend on several factors. One of these is the amount of profit the company is able to accumulate from its various projects. Other factors include the performance of the business and the profitability of the venture. When determining the profit sharing percentages, the board of directors will take into consideration the value of the services or products offered by the non-profit organization. They will also take into account the market value of the assets of the venture and the worth of the goodwill created by the members towards the company.
Profit sharing may also be carried out through the sale of a certain portion of the company’s property. If the profits of a project exceeds a set amount, then a certain percentage of these profits will be donated to the cause. The amount may vary between one company and another, though it is usually around 15% of the project’s overall profits. The other option of profit sharing, where all the profits of a venture will go towards a single charitable organization, has been widely used for several years now and continues to be practiced in certain cases.
Profit sharing is not only used for businesses; it has also been a way of life for some people. For example, some religious organizations will allow their members to share in the costs of their organization. This is done through services such as building and maintenance, which are provided free of charge. Religious institutions may also get money from their benefactors through profit sharing programs. In most cases, it requires the agreement and approval of the benefactor’s members before such an activity can be initiated.