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For example, when a transaction with a material effect on a company's financial condition is contemplated, the finance department will prepare, for management and board review, a business plan containing pro forma financial statements demonstrating the expected effect of the proposed transaction on the company's financial viability.
The IRS has indicated it will use the Form 990 as an enforcement tool, particularly regarding executive compensation. For example, nonprofits that adopt specific procedures regarding executive compensation have a safe harbor from excessive-compensation rules under section 4958 of the Internal Revenue Code and Treasury Regulation section 53.4958 ...
The for-profit entity may also be directed by a sole proprietor, while a non-profit organization needs a board of directors. Like any other for-profit organization, it will base its accounting on the quarterly income, whereas a non-profit charity will purely focus on the activities carried out. [10]
For-profit business plans typically focus on financial goals, such as profit or creation of wealth. Non-profit, as well as government agency business plans tend to focus on the "organizational mission" which is the basis for their governmental status or their non-profit, tax-exempt status, respectively—although non-profits may also focus on ...
A not-for-profit or non-for-profit organization (NFPO) is a legal entity that does not distribute surplus funds to its members and is formed to fulfill specific objectives. [1] An NFPO does not earn profit for its owners, as any revenue generated by its activities must be put back into the organization.
Therefore, it cannot obtain IRS 501(c)(3) non-profit status as a charitable organization. [4] [5] A mutual-benefit corporation can be non-profit or not-for-profit, but it still must pay regular corporate tax rates. A mutual benefit corporation will pay the same taxes as a regular for-profit corporation, with C corporation tax rates.
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