What is the difference between a for-profit business and a nonprofit organization?

There are several differences between nonprofit corporations and profit-driven corporations.

1. Nonprofit corporations cannot operate for profit.
   This means
   • They cannot distribute corporate income to shareholders.
   • Funds acquired by nonprofit corporations must stay within the corporate accounts to pay for:
     • reasonable salaries
     • expenses and
     • the activities of the corporation
2. In a nonprofit corporation
   • Income cannot personally benefit any individual, as it does in a profit-driven corporation.
   • Salaries are not considered personal benefits because they are necessary for operation of the corporation
   However, an excessive salary may cause a corporation to lose its nonprofit status.
3. No one owns a nonprofit organization in the way that shareholders own a for-profit corporation.
   
   The typical nonprofit organization is a corporation controlled by a board of directors.
   
   The board of directors elects officers who conduct the day-to-day business operations of the organization.
   
4. Many organizations qualify for nonprofit status under various definitions and can include everything from churches to sports leagues and public interest law firms.