google.com, pub-6663105814926378, DIRECT, f08c47fec0942fa0 Forms of Organization of Economic Entities 4289

Forms of Organization of Economic Entities

The forms of organization of economic entities are defined according to the activity to which the organization is dedicated and the purposes for which it was created.

It is important to note that there are three types of economic entities: for-profit organizations, non-profit organizations and government organizations.

Likewise, it is of utmost importance that the organization of economic entities is well established. For these to function properly and fulfill their specific purposes, they must have an organization and administration that allows control of the decision-making made by the entity.

Ways in which economic entities are organized
Non-profit economic entities
Non-profit organizations are all those entities that do not have as their main objective to generate economic benefits.

These organizations are characterized because their purposes are community or help. This can be of charity or protection towards some type of citizen.

On the other hand, these associations are created through agreements between legal and natural persons, with the goal of offering activities of social good and providing support to individuals who require it.

However, although non-profit entities are not intended to make a profit, they require monetary funds to help keep the organization running.

Monetary funds are usually donations from private companies and state organizations. Among the most famous non-profit economic entities are: Unicef, and the Red Cross.

For-profit economic entities
Profit-making entities are understood to be companies whose main goal is to generate profits and multiply the capital invested by the partners.

These profits in some cases are used to be reinvested, on the other hand they can also be distributed among the members or partners that make up the entity.

For-profit economic entities have the particularity of being able to carry out various economic and business activities.

Some internationally recognized for-profit companies are: Nestlé, Apple, Colgate, Google, Facebook. These companies are intended to generate profits and expand as a business organization.

Government economic entities
They are the state organizations belonging to the public administration, that is, the government of the day is in charge of managing these organizations.

It is important to note that government entities aim to provide public service to individuals who need it.

Generally, the services provided by government agencies are free to the community. These are paid for through taxes and other income received by each State.

However, some public agencies generate part of the funds that help them function.

There are different types of government agencies, this will depend on the country in which they are located. For example, there are the organisms in charge of preserving the environment, those that focus on issuing documentation to resident citizens, public ministries, prefectures and hospitals.

All these entities have the same goal, which is to serve the community in general.

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