A firm can be defined as an economic unit that employs factors of production to produce goods and services that it sells to other economic units - individuals, firms and government etc. A firm is also a decision-making unit. It is assumed to always take decisions consistent with the accomplishment of its set goal(s) or objectives and normally that of maximization of its profits or return on owners capital except for non-profit organizations. Profit making organizations raise capital for investment in profitable ventures with the sole objective of maximising its profits there from and therefore maximize return to owners of capital, whereas Non-profit organizations are companies formed for purposes other than the profit of their members. Such organizations exist for social, charitable or quasi-charitable purposes. Profit making organizations can be either private or public. A private company is defined as one which is limited in membership to between two and fifty. It is prohibited by law from making invitation to the public to subscribe for its shares and also restricted to transfer of its own shares. A public company on the other hand are organizations defined as such by its Memorandum of Association and add the suffix "Public Limited Company" (PLC) to its name. For a firm to qualify as a public company, it must have been quoted on the stock-exchange and it is also subject to the Companies and Allied Matters Decree (CAMD) (1990) and other laws regulating operations of public firms in the country. The basic finance function of raising funds for the operation of the organization takes place in all organizations, whether profit or non-profit organization, private or public firm. However, the finance function in profit-making organizations is more complex and requires attention of skilled financial managers.
