Nonprofit Operation And Formation
A not-for-profit corporation is a corporation formed under the not-for-profit corporation law. Not-for-profit corporations may not be formed for profit or financial gain. They can make money, however, and the officers can take a salary as part of the corporation.
They come in two broad categories: Charitable Corporation/Noncharitable Corporation. That status is set at the creation, so it’s important to understand the difference in tax status.
What Is A Charitable Corporation?
A Charitable Corporation is any corporation formed for Charitable Purposes. Charitable Purposes of a corporation means one or more of the following purposes: charitable, educational, religious, scientific, literary, cultural or for the prevention of cruelty to children or animals. These corporations are granted a 501(c)(3) status by the IRS after applying, and once granted, can offer tax deductions to their donors.
What Is A Noncharitable Corporation?
According to New York Consolidated Laws, Not-For-Profit Corporation Law – NPC § 102., A Noncharitable corporation means any corporation formed under the Not-for-Profit Corporation Law, other than a Charitable Corporation, including but not limited to one formed for any one or more of the following nonpecuniary purposes: civic, patriotic, political, social, fraternal, athletic, agricultural, horticultural or animal husbandry, or for the purpose of operating a professional, commercial, industrial, trade or service association. Their status varies based on what the purpose is, but overall does not allow for tax deductions as they are not 501(c)(3)s.
Schedule An Appointment To Learn More
Gold Law Firm has created numerous nonprofits and can assist in guidance in setup, compliance, and ongoing governance issues. Call 518-517-3250 to schedule your first appointment or send an email to learn more about how Gold Law Firm can help you.