The difference between an enterprise and an institution.

Organizations are called differently: it all depends on the characteristics of their activities, the number of staff, the scale of work. There is a significant difference between enterprises and institutions, but it is not immediately noticeable. Understanding the differences will help you to correctly use the names of organizations in your daily activities.


Enterprise - a commercial organization with the status of a legal entity and pursuing commercial goals: production of products, trade in goods, provision of services and performance of work. A legal entity includes a wide range of assets, including movable and immovable property, exclusive rights, working capital, finished products and raw materials, and much more.

Institution is a non-profit organization created to perform tasks related to socio-cultural, educational, educational and other activities that do not directly involve making money. The owner can be either a private or a legal entity, the state, financing the project in part or in full.


Thus, the main difference between an enterprise and an institution is the goals of the activity. The company is exclusively engaged in commercial activities, focusing on making profit. Its effectiveness is assessed by the level of profitability, that is, net profit. The institution pursues other goals, including education of citizens, charity and education. Its effectiveness can be assessed both qualitatively and quantitatively: the amount of funds raised, the number of patients cured, etc. It is worth noting that the property of an enterprise is accepted on the basis of the right of economic management, of an institution - of operational management.


  1. Activity. An enterprise is a business entity that is engaged in entrepreneurship. The institution carries out non-commercial activities.
  2. Purpose of existence. The enterprise is focused on making a profit, the institution is focused on training, treatment, education of citizens, as well as other important tasks not related to making money.
  3. Functions. The enterprise is engaged in production and trade activities or the provision of services on a reimbursable basis, the institution performs social, managerial and other functions free of charge.
  4. Real rights to property. The manager takes over the enterprise on the basis of the right of economic management, the institution - on the basis of operational management.