What is Non Profict Corporation?
Not for Profit Corporations known as nonprofits
As the name suggests Not for Profit Corporations are legal entities of which no part of the income or profit is distributed to its members, directors or officers. Any profit yielded by the company by the end of a fiscal year must be reinvested or divested into the corporation. Nonprofits may be organized for any lawful purpose so long as it is not for a pecuniary gain, for example charitable, benevolent, educational, religious purposes, among others. Despite what many believe, nonprofits do have to pay taxes; however, some nonprofits qualify for to be recognized as exempt from federal income tax. In order to apply for a tax-exempt status the nonprofit must apply with the Internal Revenue Service based on the type of organization. For instance, to be exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be created and work exclusively for the exempt purposes expressed in the Internal Revenue Code section 501(c)(3) and no income may benefit any private shareholder or individual.
Nonprofits have a very similar structure to profit corporations but generally have a more requirements for example the board of directors must consist of three or more individuals.
The purpose behind a nonprofit corporation generally requires the founding members to be very invested in objective of the company and promoting its charitable interest; let us handle the company’s organization so you may focus on what lays ahead.