Nonprofit Incorporation

Incorporate a Nonprofit Organization

A nonprofit corporation is formed for purposes other than generating a profit and no part of the organization's income is distributed to its directors or officers. Examples of common nonprofit corporations are churches, schools, charities, museums, hospitals, volunteer organizations, homeless shelters and civic associations. Nonprofit corporations are formed to carry out a charitable, educational, religious, literary, scientific or other purpose authorized by the IRS.

The most common federal tax exemption for nonprofits comes from Section 501(c)(3) of the Internal Revenue Code, which is why nonprofits are sometimes called 501c3 corporations. 

Incorporating your nonprofit organization will help you establish the legal protection that separates your personal assets from the activities of the corporation. Do not leave your personal wealth exposed!

Benefits of Incorporating your Nonprofit Association

  • Tax exempt status. Organizations that meet the requirements of Internal Revenue Code section 501(c)(3) are exempt from federal income tax as charitable organizations. Obtaining tax-exempt status can amount to significant savings.
  • Grant eligibility. A 501(c)(3) nonprofit is eligible to receive both public and private grants.
  • Personal asset protection. The responsibility of debts and liabilities of the corporation are not personally held against the officers, directors, trustees or members of the corporation.
  • Tax-deductible donations. Contributions given to a 501(c)(3) nonprofit corporation are tax-deductible by the donor.
  • Continuity. The corporation's duration does not depend upon its members. A nonprofit corporation can continue to exist and do business if an owner dies or wishes to sell their interest.
  • Special postage rates. Nonprofits can apply for and receive a mailing permit that gives them a special reduced nonprofit rate for mailings. This is especially helpful for organizations that will do a lot of solicitation by mail.
  • Property tax exemptions. In addition to an exemption from income taxes, nonprofits are usually exempt from paying property taxes on real estate and other property. Contact your county assessor's office for more information on property tax exemption, which is often called a "welfare exemption."

Characteristics of a Nonprofit Corporation

  • Qualifications for membership are defined in the bylaws.
  • There are no owners or stockholders in a nonprofit corporation.
  • Classes of membership can include voting and non-voting members.
  • Nonprofit corporations are managed by a board of directors elected by the voting members.
  • Benefit of membership is the only allowable personal gain.

Steps to Start a Nonprofit Corporation

  1. Choose a business name.
  2. Incorporate online or by phone with CorpAmerica.
  3. Apply for your IRS tax exemption.
  4. Order a Business License Compliance Package from CorpAmerica and obtain any necessary licenses and permits.
  5. Apply for a state tax exemption.
  6. Draft bylaws.
  7. Appoint directors.
  8. Hold a meeting of the board.

Costs to Form a Nonprofit Corporation

CorpAmerica has nonprofit formation packages for as little as $49 in Delaware and Nevada (plus applicable state fees). The cost to form a nonprofit corporation in other states starts at $89. We have multiple packages to choose from to meet your individual needs and budget.

Start a Nonprofit Corporation Today

Getting started is easy with our online order form. CorpAmerica is the low cost leader in business formation services. We believe in securing your right to save both time and money. Incorporating your nonprofit can help you qualify for tax exemptions, accept donations, become eligible for grant money, and more. If you have any questions or prefer to place your order by phone, call 877-246-2462 (toll-free) or 302-636-5448 to speak with a business specialist now.

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Did you know?

Businesses set up as S Corporations are limited to one type of stock offering and they are also limited to 100 shareholders. Also, all shareholders in an S Corporation must be U.S. citizens or legal U.S. residents.