For fiscal purposes, a non-profit organization (NPO) is an entity created and operated solely for non-profit purposes. Its income must not be distributed to proprietors, shareholders or members, or made available to them for personal gain. An individual, succession or charity is not considered an NPO.
Example |
A recreational club opened in your city last year. The club derives most of its income from membership dues, and spends all or almost all of its income on recreational activities for its members. The club can therefore be considered an NPO. |
This term can be used where the purpose of the activity does not consist in realizing earnings or profits. Examples include
An organization whose principal activity consists in carrying on a business is not generally considered to be an NPO.