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What are the advantages and disadvantages between profit corporations and nonprofit...

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linnie4352 | Student, Undergraduate | Salutatorian

Posted November 10, 2010 at 8:13 AM via web

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What are the advantages and disadvantages between profit corporations and nonprofit organizations?

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epollock | Valedictorian

Posted November 11, 2010 at 7:50 AM (Answer #1)

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The major advantages of the profit corporation are that people have  a legal interest in the corporation, people can receive dividends or cash from the profits and people can own shares, vote on the direction of the company and serve on its board of directors. In the case of a nonprofit organization, there is no legal ownership for individuals, only the existing board members may decide who can fill open board seats, and the profit must be redirected or reinvested back into the business, within certain laws and regulations in the state in which the nonprofit is located. There is a real financial incentive for profit corporations, while there may be altruistic compensation for nonprofit organizations.

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