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.

  1. The organization must be formed exclusively for the exempt purpose.
  2. None of the earnings should be for the benefit of its shareholders.
  3. It must not be to influence legislatures or political campaigns.

Pros

  • Tax-exempt
    • The net income of the corporation is not taxed, thus all the earnings are available for furthering the purpose of the non-profit.
  • Investments
    • A non-profit corporation may qualify for grants that are exclusively reserved for 501(c)(3) companies.

Cons

  • 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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