Nonprofit Corporations

Unlike for profit corporations which generally can be formed for any lawful purpose, nonprofit corporations can only be established for certain specified purposes that provide some type of public benefit. If your group qualifies for nonprofit status, then forming a nonprofit corporation under state law is a fairly simple and straightforward process.  The real benefit in becoming a nonprofit for most groups, however, is the tax exemption that nonprofits receive from the IRS. Getting that exemption from the IRS is a fairly complicated process and, once it is obtained, the nonprofit must comply with IRS rules and regulations that other corporations and entities are not subject to. This is the trade-off for the tax and other benefits that nonprofits receive.

If you are considering forming a nonprofit, you'll want to understand both the benefits of nonprofit status and the rules and restrictions that apply to tax-exempt nonprofits.  

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