A Non-Profit Corporation is a standard corporation with a tax exempt status from the IRS. The organization will be exempt from paying taxes but must meet strict requirements.
- The organization must be formed exclusively for the exempt purpose.
- None of the earnings should be for the benefit of its shareholders.
- It must not be to influence legislatures or political campaigns.
- The net income of the corporation is not taxed, thus all the earnings are available for furthering the purpose of the non-profit.
- A non-profit corporation may qualify for grants that are exclusively reserved for 501(c)(3) companies.
- Difficult to Start
- Articles of incorporation must be filed and the tax-exempt status must be obtained from the IRS.
- Difficult to Maintain
- A non-profit corporation is required to maintain strict compliance with IRS requirements as well as corporate formalities.
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