Distinguish between profit and not-for-profit organizations.

— Kishore V, SME and ACW at Edumarz

For the following reasons, the distinctions between profit and non-profit organizations may be clearly drawn:

1. A profit organization is described as a legal entity that is organised only for the purpose of profiting from its commercial operations. A non-profit organization, on the other hand, is one that is run with the primary goal of improving society as a whole.
2. A profit organization, as the name implies, is dedicated to increasing the company’s profits. A non-profit organization, on the other hand, is dedicated to giving service and contributing to society’s well-being.
3. A profit organization is a sole proprietorship, partnership, or corporation, whereas a non-profit organization is a group of people, such as a club, trust, public hospital, cooperative society, and so on.
4. In the case of a single proprietorship, partners in the case of a partnership, and directors in the case of a corporation, the administration of a profit organization is overseen by a sole proprietor, partners in the case of a partnership, and directors in the case of a corporation. On the contrary, a non-profit organization’s management is overseen by a board of directors, trustees, committees, or governing bodies.
5. The selling of goods and services is a profit organization’s primary source of revenue. Non-profit organizations, on the other hand, rely heavily on donations, subscriptions, membership fees, charity, and other forms of funding.
6. When it comes to the start-up of the corporation, the owners invest a significant amount of money in order to manage the firm. Non-profit organizations, on the other hand, raise funding for their start-up costs through donations, grants, legacies, subscriptions, and other means.
7. The income statement, balance sheet, and cash flow statement are all part of a profit organization’s financial statement. Non-profit organizations, on the other hand, create receipt and payment accounts, revenue and expenditure accounts, and a balance sheet at the end of the accounting year to determine their financial situation.
8. Profit is money made by a profit organization that is transferred to the capital account. The surplus generated by the excess of revenue over costs, on the other hand, is transferred to the capital fund.