Whats the difference between a mutual company and stock company?
A mutual company can have divisible surplus. A stock company can have profits. Imagine a group of people who form a group to wash cars. At the end of each day they pay their expenses and have money left over. That money is mutually owned by the members. They divide that surplus of funds based upon a formula determined in advance. The division of extra cash is called a divisible surplus. Imagine another group of people. They put up their own money to form a corporation that washes cars. At the end of each day the company pays their expenses and has money left over, we hope. That extra money is called a profit. Mutual vs. Stock. Easy?
