Not-for-Profit Companies

A Not-for-Profit Company is an organization which has now true ownership, but rather is operated by directors. Not-for-Profit Companies receive tax-exempt status. By obtaining tax-exempt status a Not-for-Profit can use its tax savings to grow the business. This allows the business to devote its resources to its chosen cause.

Establishing a Not-for-Profit is very similar to establishing a regular “for-profit” corporation. As such it offers similar protections to the directors as a for-profit company. Namely the directors receive limited liability protection.

Not-for-Profits must meet extra requirements to achieve tax exempt status. Forms such as an Application for Recognition of Exemption must be filed with the IRS. The application must be approved pursuant to Internal Revenue Code.


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