What Is a Nonprofit Corporation?

Video Transcript

"You have become more and more involved in watching the stock market and specifically, the rise and fall of the price of shares of individual stocks for individual corporations and you have been hearing terminology that you're not exactly familiar with and you'd like to know more information. One of the frequently ask questions is what's the difference between a nonprofit corporation and a for profit corporation. Certainly, you don't want to invest in a corporation that's not for profit. Hello, I'm Robert Todd and I'm here to answer the question, "what is a nonprofit corporation"? Well, nonprofit corporations are very similar in structure with for profit corporations. But the difference is in a for profit corporations, you're going to be able to buy stock in that corporation, it's going to be anticipated that that corporation is trying to make a profit. And from those earnings, the value of that stock is going to appreciate and you're going to gain a profit from selling at a higher price in for what you purchased and with the higher earnings of that corporation, you're also going to be anticipating a dividend. Obviously, with the nonprofit corporation, you're not even going to have ownership and there's not going to be any chance therefore for appreciation of stock or for a distribution of dividend. I'm Robert Todd and thank you for watching."