Which of the following statements BEST describes the distinction between a not-for-profit corporation and a for-profit corporation?
A) Not-for-profits do not pay their employees.
B) Not-for-profits cannot be organized for any person's private gain.
C) Not-for-profits have to dissolve when the owner leaves or dies.
D) Not-for-profits cannot hire executive officers to run the business.
E) Not-for-profits do not need to keep complete books and records.

Question

Quizplus · Accepted Answer

The key distinction between a not-for-profit corporation and a for-profit corporation is that the former cannot be organized for any person's private gain. Not-for-profit corporations are organized for specific purposes such as charitable, educational, or religious activities, and any profits are reinvested into the organization rather than distributed to shareholders. While not-for-profits may pay their employees, they cannot exist for the purpose of generating profit for individuals. The other answer choices are incorrect.

Which of the Following Statements BEST Describes the Distinction Between