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Business Question
I have a question...which kind of makes me think about all businesses that donate 100% profit to charities...
Profit is defined as "The return received on a business undertaking after all operating expenses have been met"
With most businesses, the owners of a business control profit. Another words, they have to take salaries, pay employees, pay rent etc...
operating expenses can be defined as building leases, cars, salaries etc...
So all those television ads that say 100% of all profits will be donated.
My question is this "If a company brings in a $1,000,000. Lets say the total expenses for employees, building rent, everything comes to $100,000. Meaning there is a profit of $900,000. Can the owner declare $850,000 as a salary, making the profit only $50,000? On papers and in their book keeping I would say yes, but is this legal? He is donating 100% of the profits ($50,000), but again, who has say to what the profit is. Are there laws to stop this?
kind of makes you think...
any info would be appreciated.
-rosey
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