What is a Non-Profit Corporation?
A Non-Profit Corporation generally exists for the purpose
of carrying out some socially useful objective. The Non-Profit
Corporation’s net income does not get distributed to
members, officers and/or directors. The money is used to further
the socially useful purpose. Some examples of Non-Profit Corporations
are charities, schools, churches and museums.
Is a Non-Profit Corporation exempt from taxes?
Non-Profit Corporations are not automatically exempt from
federal and state taxation. After your Non-Profit Corporation
is filed and active with the state you must then apply for
tax-free status at the federal and state level.
How does a Non-Profit Corporation obtain tax-free status?
To obtain tax-free status at the federal level you must file
IRS form 1023 to obtain 501(c)(3) tax-free status. There are
other tax free statuses but 501(c)(3) is the most common.
To obtain 501(c)(3) status, the Non-Profit Corporation must
be formed for religious, charitable, literary, scientific
or educational purposes. To obtain tax-free status at the
state level you must contact your state’s comptroller.
Can a Non-Profit Corporation pay a salary to its employees,
officers and/or directors?
Yes. The employees, officers and/or directors may be paid
a reasonable salary for their services but at no time can
any of the Non-Profit Corporation’s profitable earnings
be distributed to the officers and/or directors.
What is a Employer Identification Number?
An Employer Identification Number (EIN) is a number given
to your Non-Profit by the federal government. You can not
hire employees or open a bank account in your Non-Profit's
name without obtaining an Employer Identification Number.
Think of it as a social security number for your Non-Profit.
How do I get started?
If you choose to incorporate through IncLaunch.com then all
you have to do is complete our secure order form. After you
receive your filed incorporation documents you must then hold
an organizational meeting where your Non-Profit's bylaws are
adopted. Our corporate kit includes all of the information
and paperwork needed to complete this process.
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