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Start a Nonprofit Corporation

Register your charitable business and file for income tax exemption.

When running a business focused on charitable causes, you may want to start a nonprofit corporation. By registering your business as a nonprofit, you gain added credibility, access to public and private grants, and the ability to apply for exemption from taxation by filing a 501(c)(3).

$99+ state fees

What are the benefits of filing as a nonprofit corporation?

Save every year with tax exemption.

Nonprofit corporations can apply for tax exemption from federal taxes, sales taxes, and property taxes. This can save money over the long term and provide more funding for the business and its goals.

Gain trust and recognition.

Filing your business as a nonprofit corporation demonstrates the charitable intentions of your business to the community, providing additional credibility and trust.

Limited Liability Protection

Forming a nonprofit corporation creates the legal framework for businesses to offer services for the general good, while providing limited liability and asset protection for its owners.

We complete all of the documents

Our filing experts can quickly and accurately file a nonprofit organization and handle all of the paperwork on your behalf.

What is a nonprofit corporation?

A nonprofit corporation is a special type of corporation created specifically to provide additional benefits for businesses who intend to operate with a charitable purpose. While a nonprofit shares all of the standard benefits that come along with incorporation, it also allows a business to apply to the IRS for tax exemption status. In order to qualify for this exemption, a business must be formed to benefit the public or a specific group of individuals. Some examples of nonprofit corporations include Goodwill, YMCA, and the American Red Cross.

What are the benefits of filing as a nonprofit corporation?

Nonprofit corporations are eligible to apply for a 501(c)(3) status, which is a designation issued by the IRS to businesses that are established for a religious purpose, charities, educational or scientific reasons, as well as businesses centered in public safety and testing. Organizations that are designated as a 501(c)(3) are exempt from federal, sales and property taxes. Over time this savings can be substantial, allowing nonprofit corporations to reinvest its profits back into the organization, and give the business the chance to further service the community.

In addition, many public and private institutions that fund grants only accept applications from public charities or nonprofit businesses, so a business that relies on these kinds of grants would benefit from choosing to form as a nonprofit. Nonprofits can also receive contributions that are tax deductible for the individual who contributes, which can provide additional incentives for public donations.

What kinds of businesses should form a nonprofit?

In order to enjoy the benefits of federal tax-exempt status, nonprofit businesses and organizations must meet a few basic requirements. First, they must be formally incorporated, have chosen a name for their business, and filed their articles of incorporation (a requirement in most states) to qualify for exemption from state and local taxes.

They must also establish a mission statement. This is done not just to define their mission and values, but is also necessary for the IRS and state tax agencies to take into consideration when deciding if your business will achieve nonprofit status. The nonprofit must follow state and federal accountability rules and meet reporting requirements to remain eligible. Under the Federal Tax Code Section 501(c), a tax-exempt corporation cannot pay dividends and, upon dissolution, must distribute its remaining assets to another nonprofit group.

How does a nonprofit become tax exempt?

Simply forming a nonprofit does not grant tax exemption. Nonprofits must file for tax-exempt status with the IRS. Upon being reviewed, the agency will decide whether or not to grant tax-exempt status.

Our filing experts can help you to start enjoying the benefits of forming a nonprofit corporation today for just $99 plus state fees. Click here to get started.

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Frequently asked questions

A nonprofit is defined as an organization founded for a charitable purpose. The nonprofit has a mission statement which allows it to define its mission and values. The difference between a nonprofit and a 501(c)(3) is a tax exemption classification. A 501(c)(3) status has a charitable, educational, or religious mission and does not turn a profit.

A nonprofit is created to benefit the public good. It does not benefit its members, directors, or beneficiaries. A nonprofit fundraises specifically in the interest of helping others. Not-for-profits serve the goals or interests of their members, directors, and/or beneficiaries.

Under the IRS 501(c) code, just two types of nonprofits primarily exist: nonprofit organization and a not-for-profit organization. Several types of 501(c) classifications are available to suit the needs of your organizations. These include a 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6), 501(c)(7), and 501(c)(8).

Yes. Nonprofit organizations may be formed as an LLC or a corporation. They may also be unincorporated associations or trusts.

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