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​This commodity is excerpted from Chapter 23 of The SHRM Essential Guide to Application Law: A Handbook for HR Professionals, Managers, Businesses, and Organizations (SHRM, 2018), accounting by Charles H. Fleischer, Esq. 

A archetypal business association is formed by shareholders who advance their basic in the business with the apprehension of earning a accumulation in the anatomy of assets or on the after auction of their stock. Shareholders authority ultimate ability over the association by electing admiral and by chief issues that are axiological to the corporation’s existence, such as whether to change the company’s basic anatomy or to absorb with addition company. The directors, in turn, administer the aggregation by ambience ample behavior and appointing and administering accumulated officers.

A nonprofit organization, on the added hand, is not formed to accomplish a profit. Typically, it is a association organized beneath appropriate accoutrement of accompaniment law that prohibit arising of shares and the acquittal of dividends. Nonprofit organizations accordingly accept no shareholders, and they do not administer balance to owners. (Nonprofit organizations may accept associates who accept admiral or trustees, but the associates do not own the organization. In fact, cipher owns a nonprofit.)

Although not organized to accomplish a profit, nonprofit organizations are not appropriate to accomplish at a loss. The point actuality is that any surplus of revenues over costs charge be retained or activated to

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