Finance

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Business Types

For-Profit

  • Owned by Corporations, Shareholders, or Private Investors.
  • Focus on generating profit and making business decisions for the betterment and profitability of investors and owners of the organization.
  • Pay taxes on both property and income generated.
  • Typically, they offer less charity, as focus is generating revenue/profits for investors.
  • More aggressive billing.
  • More likely to exhibit cost-cutting behaviors.
  • Focus on high return services (ex: as elective surgeries)
  • Variety of classifications such as Limited Liability Company (LLC), Corporations (C-Corp, S-Corp, P-Corp), etc.

Nonprofit

  • Aims to serve the general community and improve public health by focusing on providing care to all individuals regardless of socioeconomic status or ability to pay for services rendered.
  • These organizations are exempt from federal and state income taxes.
  • Must provide benefit to the community such as free or discounted care for low-income individuals.
  • All profits must be reinvested within the organization for improvements in equipment, staffing, and programs within the community.
  • Funding is received from the community, government grants and donations.
  • Variety of classifications such as Limited Liability Company (LLC), Corporations (C-Corp, S-Corp, P-Corp), etc.