What Is the Difference Between a NPO and a NPC?

Difference Between NPO and NPC Formation

  • An NPO requires a constitution.
  • An NPC requires a Memorandum of Incorporation (MOI).
  • An NPC can register as an NPO.
  • Best practice is to incorporate an NPC and register it as an NPO to give credibility, resulting in more donations.

Governance and Accountability

  • NPOs use profits to attain organizational purpose.
  • NPCs have directors with fiduciary duty.
  • NPC directors oversee finances responsibly, adding accountability.

Confusion Existence in Nonprofit Sector

  • Confusion exists between NPOs, NPCs, NGOs, and PBOs in governance, funding models, transparency, and accountability.
  • NGOs operate independently from government.
  • NPCs incorporate for public benefit.
  • NPOs use profits to attain organizational purpose.
  • If income is over a threshold, NPCs require tax audits.
  • NPO boards lack this financial oversight obligation.
  • An NPC can register as an NPO.
  • An NPO cannot register as an NPC.

Objectives and Operations

  • The objectives of NPC are not linked to profit but sound financial management is important.
  • Legally entities qualify for sponsors and donations.
  • Financial statements must be prepared.
  • Credibility and financial management attract sponsorship.
  • The primary objective is to benefit the public.
  • Income and property may not distribute to incorporators, members, directors except reasonable compensation.

NPC in Nonprofit Sector

What does NPC mean in nonprofit?
What type of business is an NPC?

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