NGO vs Profit Entity

Meaning of Non-profit Organisation

The Non-profit Organisation is that Organisation which did not do their work for earning profit rather than its main objective is to do work to achieve a specific goal for the welfare of society or its members. These are founded by a group of people who come together for a common purpose, i.e. to provide service to members and people.

These types of organisations run its operation mainly on the donations, entrance fee, subscription fee, or membership fee.Example: Charitable Hospital, Charitable School, College or Educational Institutions, Clubs, Society, Colony or city Gurudwaras, Temple, Church, and Masjids

The differences between the Non-Profit and Profit Organisation are shown in the following chart

 Non-Profit OrganisationProfit Organisation
MeaningTheir main objective is to do work to achieve a specific goal for the welfare of society or its members.A profit organisation is that Organisation that exists to make a profit for its owner(s)
Main objectiveTo serve society for a better future. To earn more profit to run the business because profit is the fuel of every business.
Source of revenueThe main source of revenue for the NPO is Donations, grants, Membership fee, and entrance feeThe main source of revenue is the amount received from selling its products and services. 
Financial StatementFinancial Statements included the following statements:-
1. Receipts and payment A/c
2. Income and Expenditure A/c
3. Balance Sheet
Financial Statements included the following statements:-
1. Trading A/c
2. Profit/Loss A/c or Income statement
3. Balance Sheet
4. Cash flow Statement
Managed byThis type of business is managed by its trustees, committees, or anyone person authorized by the whole members.It includes mainly three types of business. So it is managed as per the type of business: –
1. Sole Proprietorship – Managed by its Owner
2. Partnerships – Managed by its partners
3. Companies – Managed by its Directors
Funded fromIt is started with funding received from donationsIt is started with initial capital investment by its owner(s).