Many people ask questions about the differences between a private company and an NGO. It is good to understand the general concept about the two types of companies, only so it is possible to go into detail and know about the other differences.
For those who want to open businesses, it is always good to learn more details about business organizations. Precisely for this purpose, I decided to write this text and answer the doubts of many people.
If you have doubts and want to know more about the concepts and differences between an NGO and a private company i.e NGO vs private company, you are in the right place at the right time! Keep reading the text and learn more now!
NGO: WHAT IS IT AND WHAT IS IT FOR?
The acronym NGO stands for Non-governmental organizations, NGOs are non-profit organizations, are third sector companies. Nonprofits are created to advocate a cause voluntarily and benefit society in some way.
NGO is not regarded as a company so you shouldn’t confuse an NGO to a Company and this is why you should educate yourself on the difference between NGO and company.
By determination of the UN in the year of 1950, was that nonprofit companies came to be known like Non-governmental organizations.
Private non-profit organizations help public organizations in public development. However, every company must be registered and have state registration and also the CNPJ (National Registry of Legal Entities).
Private companies are organizations that generate profit and move the economy of the country or state. Unlike the NGO, private companies are created to benefit the owners, economically and consequently the population.
According to Miguel Reale, the concept of company results from the definition given to the figure of the entrepreneur, thus considered “who carries out the professionally organized economic activity for the production or circulation of goods or services” (Art. 986, CC).
Understanding the concepts of the two types of companies, we can learn the main differences between them. The differences are simple, but there is still a lot of confusion about them.
DIFFERENCES BETWEEN A PRIVATE COMPANY AND AN NGO
Here we are going to explain all you need to know about the term NGO vs private company, we compare the NGO to Private Company.
As already mentioned, nongovernmental organizations are created to be non-profit. NGOs work mainly with the collaboration of several people, and generally, people do not receive a salary for this.
NGOs can also offer compensation to their employees, but there is a ceiling for values. The government may be helping organizations with financial incentives; other companies also play the role of NGO helpers.
Non-profit, non-governmental organizations benefit society and assist in necessary causes for the benefit of the population. Social projects and projects are the main objectives of an NGO.
In tax terms, non-profit companies are exempt from various taxes. Mainly in relation to income tax (IR) and CSSL (Social Contribution on Profit).
Private companies have a profit, that is, their employees need to be paid and be working in accordance with labor laws. Private companies also help society, with the generation of employment and production of income for the country.
Private companies have tax exemptions only if they fall under certain tax regimes, such as the simple national.
However, private companies are obliged to contribute to the collection of taxes and taxes for the maintenance of public policies.
The concepts are simple, just separate the objectives of each company and analyze the differences between a private company and an NGO.
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Remember that the NGO is always non-profit and the private company generates profit and also contributes to society in a more indirect way.