Introduction to Non Profit Corporation
If you are engaged in a social benefit type of activity, you can operate through a nonprofit corporation. To do it right one should obtain a nonprofit 501(c) (3). Nonprofit donations are tax deductible to the contributor (with some exceptions), and are not subject to corporate tax.
Many social benefit organizations from the United Way to local youth and sports activities operate through nonprofit organizations or LLCs. Not only is there favorable tax treatment but the organizers and managers can gain limited liability protection by conducting business through a chartered entity.
There are some drawbacks to a nonprofit, including restrictions on the amount of management salaries that can be paid. To overcome such issues, the B Corp, or benefit corporation, is evolving to better tackle social issues through a flexible form of for Profit Corporation. For more information or to get started, call us today at 800-600-1760.