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> non-profit business That's an oxymoron if I ever heard one. A business is literally an activity that is undertaken for the purpose of profit. There are activ

by hfkwer 3y ago

> non-profit business That's an oxymoron if I ever heard one. A business is literally an activity that is undertaken for the purpose of profit. There are activities that are entered for reasons other than profit, but they're not businesses.

wintermutestwin 3y ago
Yes, from a taxonomy perspective, you are correct. I'll edit to be precise because the definitions don't change the point of my post.
Sharlin 3y ago
Depends on the definition. If an organization is arranged as, say, a limited-liability company, then it is a business no matter what its goals are. And "profit to shareholders "is neither definitional nor mandatory; the value produced can be whatever the shareholders want it to be. Of course, most of the time it’s profit.
- grepfru_it 3y ago
  If it is an LLC, then each employee would have to be a member to exercise control and have the legal standing to request profits from the company. An LLC does NOT have a requirement to maximize shareholder profit because there are no shareholders, just members. An LLC has a max number of members and members are required to maintain their portion of tax liability (this means they will owe a % of tax due or receive a % of tax refunds). This overwhelmingly means employees are NOT part of the LLC, as all it would take is one employee not paying their taxes for the entire LLC to be at risk (also this is why investors will run like the wind from an LLC raising money). An LLC CAN have an employment contract where they offer paper shares, which can translate to profit sharing but they are called paper shares because they are unsecured debts and are literally worth nothing in the event of bankruptcy. They could be a C corp (could also be an S corp but that comes with a 100 share holder limit), but then they have a duty to maximize profit to the shareholders. In a private corporation, the shareholders may be less inclined to sue, but the option is still there and as such the CEO must work to ensure the company is profitable. If they decide to share all profits with the employees, and the employees are majority shareholders, then this likely falls within the sphere of maximize profits. There are things like a publicly-traded LLP which allows employees to own a portion of the company while offloading tax liabilities to the shareholder, but that is usually limited to companies which depend on depleting natural resources (think oil, gas, coal, lithium, etc)
  - lsaferite 3y ago
    Any multi-party LLC I've been part of, and it's been more than a few, has provisions about tax liabilities and allowed the LLC to forcefully pay them. Additionally, LLCs rules would control equity holde payouts, and provisions around equity liquidation.
    - grepfru_it 3y ago
      LLC rules do not apply during bankruptcy. Equity holders are unsecured in bankruptcy, employee salaries and secured debts have a higher priority. You can have provisions about tax liabilities, but that is a specific risk that must be mitigated in an LLC that a corporation does not have to deal with, thus it’s an added risk
Freak_NL 3y ago
I work for a business owned in whole by its employees. Its goal is to pay its employees a good salary and generally act in the interest of the employees in addition to providing its core services to its customers. There is no pay out of any profits (by design), but it's a commercial enterprise (i.e., a business) nonetheless.
- Frummy 3y ago
  So the employees profit
  - sirsinsalot 3y ago
    Hey now let's not being technical correctness in to this!
    - DangitBobby 3y ago
      Peanut gallery comments really don't add anything to the conversation. Unless this isn't sarcasm and your point is that being technically correct is practically worthless.
      - sirsinsalot 3y ago
        My point was that when commenting correctness by technicalities people often leave themselves open to dismissal in favour of more emotive arguments. A "How dare you be technically correct!" variation is both an expression of mob-correctness trumping technical correctness _and_ an acknowledgement of being technically correct. A sort of, you're right, I support you, but the crowd might not. Read shit how you like tho
  - Freak_NL 3y ago
    Not more than in any other company, with the exception that the company puts its employees needs first (but this is not exclusive to companies like mine).
  - lsaferite 3y ago
mumblemumble 3y ago
If we're talking about the United States, it's not an oxymoron at all. I've got some extremely profitable 501(c)(3) non-profit organizations I could show you. Autism Speaks comes to mind. They may not be making money for public shareholders, but they're making a lot of money for the people who run them, all the same. Also plenty of organizations look like businesses in every way except their tax status. Thrift stores, for example. Goodwill isn't a nonprofit anymore, but even when it was it also employed all the same abusive labor practices and suchlike that you'd expect from a for-profit business.

by hfkwer 3y ago

wintermutestwin 3y ago

Yes, from a taxonomy perspective, you are correct. I'll edit to be precise because the definitions don't change the point of my post.

Sharlin 3y ago

Depends on the definition. If an organization is arranged as, say, a limited-liability company, then it is a business no matter what its goals are. And "profit to shareholders "is neither definitional nor mandatory; the value produced can be whatever the shareholders want it to be. Of course, most of the time it’s profit.

grepfru_it 3y ago
If it is an LLC, then each employee would have to be a member to exercise control and have the legal standing to request profits from the company. An LLC does NOT have a requirement to maximize shareholder profit because there are no shareholders, just members. An LLC has a max number of members and members are required to maintain their portion of tax liability (this means they will owe a % of tax due or receive a % of tax refunds). This overwhelmingly means employees are NOT part of the LLC, as all it would take is one employee not paying their taxes for the entire LLC to be at risk (also this is why investors will run like the wind from an LLC raising money). An LLC CAN have an employment contract where they offer paper shares, which can translate to profit sharing but they are called paper shares because they are unsecured debts and are literally worth nothing in the event of bankruptcy. They could be a C corp (could also be an S corp but that comes with a 100 share holder limit), but then they have a duty to maximize profit to the shareholders. In a private corporation, the shareholders may be less inclined to sue, but the option is still there and as such the CEO must work to ensure the company is profitable. If they decide to share all profits with the employees, and the employees are majority shareholders, then this likely falls within the sphere of maximize profits. There are things like a publicly-traded LLP which allows employees to own a portion of the company while offloading tax liabilities to the shareholder, but that is usually limited to companies which depend on depleting natural resources (think oil, gas, coal, lithium, etc)
- lsaferite 3y ago
  Any multi-party LLC I've been part of, and it's been more than a few, has provisions about tax liabilities and allowed the LLC to forcefully pay them. Additionally, LLCs rules would control equity holde payouts, and provisions around equity liquidation.
  - grepfru_it 3y ago
    LLC rules do not apply during bankruptcy. Equity holders are unsecured in bankruptcy, employee salaries and secured debts have a higher priority. You can have provisions about tax liabilities, but that is a specific risk that must be mitigated in an LLC that a corporation does not have to deal with, thus it’s an added risk

Freak_NL 3y ago

I work for a business owned in whole by its employees. Its goal is to pay its employees a good salary and generally act in the interest of the employees in addition to providing its core services to its customers. There is no pay out of any profits (by design), but it's a commercial enterprise (i.e., a business) nonetheless.

Frummy 3y ago
So the employees profit
- sirsinsalot 3y ago
  Hey now let's not being technical correctness in to this!
  - DangitBobby 3y ago
    Peanut gallery comments really don't add anything to the conversation. Unless this isn't sarcasm and your point is that being technically correct is practically worthless.
    - sirsinsalot 3y ago
      My point was that when commenting correctness by technicalities people often leave themselves open to dismissal in favour of more emotive arguments. A "How dare you be technically correct!" variation is both an expression of mob-correctness trumping technical correctness _and_ an acknowledgement of being technically correct. A sort of, you're right, I support you, but the crowd might not. Read shit how you like tho
- Freak_NL 3y ago
  Not more than in any other company, with the exception that the company puts its employees needs first (but this is not exclusive to companies like mine).
- lsaferite 3y ago

mumblemumble 3y ago

If we're talking about the United States, it's not an oxymoron at all. I've got some extremely profitable 501(c)(3) non-profit organizations I could show you. Autism Speaks comes to mind. They may not be making money for public shareholders, but they're making a lot of money for the people who run them, all the same. Also plenty of organizations look like businesses in every way except their tax status. Thrift stores, for example. Goodwill isn't a nonprofit anymore, but even when it was it also employed all the same abusive labor practices and suchlike that you'd expect from a for-profit business.