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Comment by SllX | Hacker News Reader

I don’t know how Portuguese law works but in the United States non-profits have private owners and are private corporations. The contrast they have is with “for-profit” corporations, not “private” corporations. Given the primary purpose of being designated a “non-profit” is a tax advantage for the corporation, I’m willing to bet Portuguese corporations likely don’t differ in this manner.

Privatize is an acceptable verbiage for a government or government-owned entity which has outsourced to a private corporation.

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>Privatize is an acceptable verbiage for a government or government-owned entity which has outsourced to a private corporation.

Given how the term is conventionally used, 'privatize' implies that for-profit enterprise has taken over, and even pedantically - looking at what the root word of the term technically means instead of how the term is conventionally used - it implies for-profit enteprise, given private ownership, in the strictest sense of the term, means no restrictions on how the private actor who owns the property may use that property, including no restrictions on distributing profits to shareholders.

> Given how the term is conventionally used, 'privatize' implies that for-profit enterprise has taken over, and even pedantically

Granted this would be an uncommon use of the verbiage given the situation, that does not mean it is incorrect usage. You are correct that typically privatization occurs when a government service is executed by or government infrastructure is transferred to a private for-profit corporation, it is not necessarily the case that it has to be a for-profit corporation for privatization to occur.

Non-profits can still be and are privately owned, what’s different about them is the accounting rules they are subject to and their status per statute. In exchange for their tax advantaged status, they give up their ability to return a profit to the owners, but it still has owners.

Also just a side note, I would be interested to hear if anyone wants to chime in if any of this is fundamentally different under Portuguese law.

A private non-profit is still not directly accountable in the way a public agency is, which is the important part.

I was just disputing the claim that 'privatization' connotes using non-government contractors, as opposed to specifically for-profit enterprise.

Whether non-profit private entities have the same properties that - in the case of for-profit enterprise - motivate critics of privatization to oppose government reliance on them, is orthogonal to that point. But on the subject, that might be true, but my take is that the important part to most critics of privatization is the entities are motivated by profit.

In most situations, a non-profit entity cannot be owned by a corporation in such a way that would give it controlling interest. If you are planning on filing for tax exemption, this is absolutely the case. A non-profit, however, can own (partially or completely) a for-profit corporation and have controlling interests.

> In most situations, a non-profit entity cannot be owned by a corporation in such a way that would give it controlling interest.

I think you mean to say, "a non-profit entity cannot be owned by a for-profit entity in such a way that would give it controlling interest"

A corporation can be non-profit (aka not-for-profit), and there is no problem with non-profit corporation A owning non-profit corporation B. Non-profit vs for-profit is orthogonal to corporate vs other (e.g. trust) legal structure.

Yeah, I botched the specifics on that. My fault for not rereading what I wrote prior to posting.

Sure, but also that doesn’t contradict the nature of a non-profits as corporations with a private ownership structure. Non-profit is the colloquialism for a corporation with a certain status per a statute that grants the corporation some tax exemptions in exchange for their ability to return a profit. The corporation receives a benefit for this status and is subject to stricter accounting rules, but is still a private corporation in and of itself.

> Non-profit is the colloquialism for a corporation with a certain status per a statute that grants the corporation some tax exemptions in exchange for their ability to return a profit

Not all non-profits are corporations–many non-profits are trusts, and legally speaking trusts are not corporations (although it is not uncommon for them to own corporations, or to have corporations as their trustees–or even beneficiaries). Many small non-profits are unincorporated associations. Nonprofit versus for-profit status is an orthogonal dimension from corporate vs non-corporate legal structure.

Also, "non-profit" isn't a "colloquialism", it is an official legal term in several jurisdictions: for example, 37 US states have (at least partly) adopted the American Bar Association's "Model Nonprofit Corporation Act" [0]. And it isn't just an official legal term in the US, see section 48 of the Australian state of Victoria's Payroll Tax Act 2007, entitled "Non-profit organisations" [1]

[0] https://en.wikipedia.org/wiki/Model_Nonprofit_Corporation_Ac...

[1] https://austlii.edu.au/cgi-bin/viewdoc/au/legis/vic/consol_a...

In Portugal there are basically no non-profits, it's code for Catholic Church-adjacent institutions.

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