Form a Non-Profit Corporation

Start with the right business structure

Answer a few easy questions to help you decide which one may be your best choice

What Distinguishes a Nonprofit Corporation?

Many people have fantastic ideas about how to make the world a better place – they just need the resources to turn those ideas into action. Even though an individual or a dedicated group can do some important things, choosing to form a nonprofit can be one of the most valuable choices any motivated person can make. Choosing to start a nonprofit is a big step but if someone is committed to a particular goal, this is a great way to achieve those dreams.

While businesses and corporations are traditionally formed in order to generate profit, a nonprofit corporation or nonprofit organization is formed for other reasons. For instance, many community activist groups become nonprofit corporations in order to access important tax benefits and financial resources that would be unavailable otherwise.

Basics

Benefits

Checklist

Taxes

Why Choose DoMyLLC?

Starting a nonprofit organization does not have to be difficult; in fact, thanks to our individual care and live support we can offer a greater degree of service than other business filers. Our dedicated team makes choosing to file a nonprofit one of the best decisions you ever make. Customer satisfaction is always 100% guaranteed.

We offer competitive pricing on all business filing and trademark services. With a little help from our convenient two-step process, your organization can be ready to go to work in less time. Let us handle the paperwork so your team can take care of other tasks.

Advantages of a Nonprofit

In traditional corporations the profits generated by a company are divided out among shareholders. While revenue is sought by nonprofit corporations, profits are not given to shareholders, owners, or directors. Rather, surplus financial resources are put towards furthering the goals of the organization.

Many people are surprised to discover that nonprofit corporations are intended to generate revenue. The rules regarding the revenue of nonprofit organizations are quite clear: the financial resources must be used to sustain the organization’s operation. Long-term sustainability is a standard goal of nonprofit corporations.

Comparison Chart

LLC

C-Corp

S-Corp

DBA

LLCs provide personal liability and asset protection. Members (owners) are not held personally liable for the debts of the company.

C-Corps provide personal liability and asset protection. Officers, Directors, and Shareholders are not held personally liable for the debts of the company.

S-Corps provide personal liability and asset protection. Officers, Directors and Shareholders are not held personally liable for the debts of the company.

Owners have no personal liability or asset protection. Owners are held personally liable for the debts of the company.

Pass through taxation. LLCs are not taxed at the Corporate level. The profits and losses pass through to the members to report with their personal income tax.

C-Corps are double taxed. The company is taxed at the corporate level and dividends distributed to share holders are taxed as well.

Pass through taxation. S-Corps are not taxed at the Corporate level. The profits and losses pass through to the shareholders to report with their personal income tax.

DBA's are not taxed at the corporate level. Profits and losses are report by the owner/owners with their personal income taxes.

Although fees vary by state, LLCs are required to pay a filing fee along with the article of organization to set up an LLC.

Although fees vary by state, C-Corps are required to pay a filing fee along with the articles of incorporation to set up an C-Corp.

Although fees vary by state, S-Corps are required to pay a filing fee along with the articles of incorporation to set up an S-Corp.

Most DBA filings are done at the county level and do not require a state formation fee. Some states de require a state level registration and filing fee.

LLCs can be member managed or manager managed. In a member managed LLC the owners of the company are the ones that manage the day to day activities of the LLC. In a Manager-managed LLC the member elected a manager or managers to manage the day to day activities of the LLC.

C-Corps have shareholders, directors and officers. The shareholders are the owners of the company. The directors are elected by the shareholders and they appoint/elect officers to run the day to day activities of the business. People can hold multiple offices A C-Corp can have one person who is the only shareholder, directors and officer.

S-Corps have shareholders, directors and officers. The shareholders are the owners of the company. The directors are elected by the shareholders and they appoint/elect officers to run the day to day activities of the business. People can hold multiple offices A S-Corp can have one person who is the only shareholder, director and officer.

DBA owner/owners run ALL day to day activates of the company and have no restrictions within their role.

LLCs have a very informal business structure. LLCs have become very popular to form for this reason. LLCs are not required to hold meetings, documents minutes of meetings, issue stock or elect directors.

C-Corps have a very formal structure. C-Corps are required to have bylaws, hold annual meetings, documents minutes of meetings, issue stock and elect directors. Failure to comply with these formalities could cause the corporate veil to be pierced.

S-Corps have a very formal structure. S-Corps are required to have bylaws, hold annual meetings, documents minutes of meetings, issue stock and elect directors. Failure to comply with these formalities could cause the corporate veil to be pierced.

No corporate formalities are required.

LLCs can be either perpetual or have and finite end date. The existence term of an LLC is usually document in the operating agreement of the company. Some states require on the article of organization to list a termination date or list a perpetual existance. If perpetual the company will continue to exist the member die or if member interests are transferred.

C-Corps are a separate legal entity and have a perpetual existence. The corporation survives death and or transfer of stock of the owners.

S-Corps are a separate legal entity and have a perpetual existence. The corporation survives death and or transfer of stock of the owners.

A DBA ends with the death of the owner/owners or upon closing the business.

Most states require LLCs to file a annual report of pay franchise taxes on a yearly or biennially. Some states do not require any filings.

Most states require C-Corps to file a annual report or pay franchise taxes on a yearly or biennially. These fees can range from $10-$1,000 depending on state guidelines Some states do not require any filings.

Most states require S-Corps to file a annual report or pay franchise taxes on a yearly or biennially. These fees can range from $10-$1,000 depending on state guidelines. Only a handful of states do not have a annual or biennial filing requirement.

No ongoing maintenance or yearly filing requirements.

Since LLCs do not have stock to issue they can not sell stock to raise capital. LLCs are a separate legal entity and can earn credit, they can also obtain bank loans to raise capital. LLCs can get capital from existing member to take on additional member if approved in their operating agreement.

C-Corps can raise capital through selling varies types of stock. Once someone purchase stock they become a shareholder and business owner. Since C-Corps are a separate legal entity and can earn credit they can also obtain bank loans to raise capital.

S-Corps can raise capital through selling varies types of stock. Once someone purchase stock they become a shareholder and business owner. Since S-Corps are a separate legal entity and can earn credit they can also obtain bank loans to raise capital.

Capital is generally raised through bank loans since DBAs can not issue stock.

Non-profit corporations must first file as a non-profit with the state they are located in. Once this has been completed successfully, 501c filings can proceed. Among other things, this designates the corporation as non-profit and therefore exempt from IRS taxation.

FAQ

A Nonprofit Corporation is exactly what it says, “Nonprofit.” Unlike a C-Corp, Nonprofits do not have stock, hence they have no owner. Like C-Corporations there is a board of directors and officers that run the organization.

Unlike General for Profit Corporations, there is an additional step in filing a Nonprofit Corporation. After the articles of Incorporation are filed with the Secretary of state the Nonprofit must file to become, “Tax Exempt” with the IRS.

Federal tax exemption 501C provides that there are 28 types of nonprofit organizations (501C 1-28) that are exempt from some federal income taxes. Once the exemption is approved by the IRS, the filings required to become a nonprofit corporation are complete. Under this tax code the company is not allowed to pay dividends and if the company is ever dissolved all assets must be distributed to another nonprofit corporation.

There are formal requirements in order to maintain corporate liability protection for owners of the corporation. Corporations are required to:

  • Maintain bylaws
  • Hold annual meeting
  • Hold annual meeting
  • File state annual reports
  • File taxes

For a complete list of FAQ, please visit here.

Ready to Start Your Nonprofit Corporation?

Our team is ready to handle all the paperwork required for you to form a nonprofit; all you need to do is complete your order of $99 (plus applicable state taxes), then sign and verify a few documents. The entire process takes very little time thanks to our convenient two-step process.

Package Includes:

  • Name Availability Check
  • Articles of Incorporation
  • Sample Bylaws
  • Notices of Various Corporate Meetings
  • Minutes to Document Meeting
  • Compliance Calendar

If you are interested in starting a Nonprofit Corporation, give our office a call at 888-366-9552.