Follow Your Dream
Updated: Sep 11, 2018
If your organization is involved primarily in educational, scientific, religious, or charitable endeavors, you'll probably want to form a nonprofit corporation for the liability protections and tax advantages this status provides.
How to Start A Nonprofit Organization
Incorporating your nonprofit will set legal protections in place that can keep you and your directors' personal assets separate from the company's liabilities. There are a number of other benefits to forming a nonprofit, as well.
In general, nonprofit corporations enjoy the following benefits:
Limited liability protection. Directors and officers are not personally liable for the organization's debts and liabilities.
Perpetual existence. The corporation continues even if a director leaves the business or passes away.
Eligibility for grants. Nonprofits may be eligible for certain public and private grants.
While nonprofits are bound by different state laws than for-profit enterprises, in general their formation processes are quite similar. Like a regular corporation, nonprofits must file Articles of Incorporation with the state in which they wish to incorporate.
Nonprofit Tax Forms
In addition, the IRS requires nonprofit organizations seeking tax-exempt status to file Form 1023. Several states also require organizations to file for state-level tax-exemption. The nonprofit status most commonly sought by organizations is the Internal Revenue Service's 501(c) tax-exempt status. Organizations that qualify for 501(c) status enjoy the following advantages:
Tax-exempt status. Qualifying nonprofits can apply for federal and state tax-exempt status
Enhanced credibility. Potential donors may be more inclined to give to an organization that has an official nonprofit status
Tax-deductible donations. Donations made by individuals to the nonprofit corporation may be tax-deductible
Possible exemption. from certain property taxes.
Reduced postage rates.
www.KenGordonPA.com Can Help Nonprofit Incorporation
Ken Gordon can help you form a nonprofit corporation and assist your nonprofit by providing the forms necessary for it to obtain tax-exempt 501(c) status with the IRS.