Features of Non-Trading Concerns

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on October 7, 2021

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.

2. Entity

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.

5. Budgeting

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.

True Tamplin, BSc, CEPF®

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.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

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