Features of Non-Trading Concerns
Non-trading concerns, also known as non-profit organizations, are characterized by the following features.
1. Non-Profit Motivation
Non-trading concerns do not seek to earn profit. Instead, their main objectives are to serve their members or society as a whole.
The entity concept is also applied to non-trading concerns because these organizations do not have owners.
3. Forms of Organizations
Common organizational forms for non-trading concerns include clubs, societies, charitable bodies, and public institutions (e.g., schools, colleges, hospitals, dispensaries, and libraries).
4. Sources of Income
Non-trading concerns have limited sources of income. In many cases, these organizations are dependent on the donations given by the members and outsiders. This is because subscriptions received from members may not cover all operating expenses.
Large-scale organizations, even if they are non-trading concerns, prepare an annual budget.
6. Use of Funds
Non-trading concerns spend their funds so as to maximize the benefit to the members.
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.