Why a Non-Profit Organisation does not distribute its Surplus to its members???
Aerik Dhanjal (Article) (55 Points)
15 June 2010Why a Non-Profit Organisation does not distribute its Surplus to its members???
Siddarth R Sunder Ram
(Finance Professional)
(230 Points)
Replied 15 June 2010
If the non-profit organization is constituted as a company under sec 25 of the Companies Act, then it is prohibited from paying dividends i.e. distributing its surplus, to its members (since the license is granted only on this condition).
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