A nonprofit corporation is any
legal entity
In law, a legal person is any person or legal entity that can do the things a human person is usually able to do in law – such as enter into contracts, lawsuit, sue and be sued, ownership, own property, and so on. The reason for the term "''le ...
which has been
incorporated under the law of its jurisdiction for purposes other than making profits for its owners or shareholders. Depending on the laws of the jurisdiction, a nonprofit corporation may seek official recognition as such, and may be
taxed differently from
for-profit corporations, and treated differently in other ways.
Public-benefit nonprofit corporations
A
public-benefit nonprofit corporation
A public-benefit nonprofit corporationnonprofit
A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity orga ...
is a type of
nonprofit
A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...
corporation
A corporation or body corporate is an individual or a group of people, such as an association or company, that has been authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law as ...
chartered by a
state government
A state government is the government that controls a subdivision of a country in a federal form of government, which shares political power with the federal or national government. A state government may have some level of political autonom ...
, and organized primarily or exclusively for
social
Social organisms, including human(s), live collectively in interacting populations. This interaction is considered social whether they are aware of it or not, and whether the exchange is voluntary or not.
Etymology
The word "social" derives fro ...
,
educational
Education is the transmission of knowledge and skills and the development of character traits. Formal education occurs within a structured institutional framework, such as public schools, following a curriculum. Non-formal education also fol ...
,
recreational or
charitable purposes by like-minded citizens. Public-benefit nonprofit corporations are distinct in the law from
mutual-benefit nonprofit corporations in that they are organized for the general
public benefit, rather than for the interest of its members. They are also distinct in the law from religious corporations.
Religious corporation
A
religious corporation is a nonprofit corporation organized to promote
religious
Religion is a range of social- cultural systems, including designated behaviors and practices, morals, beliefs, worldviews, texts, sanctified places, prophecies, ethics, or organizations, that generally relate humanity to supernatural ...
purposes.
Often these types of corporations are recognized under the law on a subnational level, for instance by a
state or
province
A province is an administrative division within a country or sovereign state, state. The term derives from the ancient Roman , which was the major territorial and administrative unit of the Roman Empire, Roman Empire's territorial possessions ou ...
government. The government agency responsible for regulating such corporations is usually the official holder of records, for instance a state
Secretary of State. Religious corporations are formed like all other nonprofit corporations by filing articles of incorporation with the state. Religious corporation articles need to have the standard tax exempt language the IRS requires.
Religious corporations are subject to less rigorous state and federal filing and reporting requirements than many other tax-exempt organizations, such as
mutual benefit nonprofit corporations, or
public benefit nonprofit corporations. Depending on the state in which they are located, they may also be exempt from some of the inspections or regulations governing non-religious groups performing the same services.
Corporation sole
Religious corporations are permitted to designate a person to act in the capacity of
corporation sole
A corporation sole is a legal entity consisting of a single ("sole") incorporated office, occupied by a single ("sole") natural person. .
Mutual-benefit nonprofit corporations
A
mutual-benefit nonprofit corporation or membership corporation, in the United States, is a type of
nonprofit
A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...
corporation
A corporation or body corporate is an individual or a group of people, such as an association or company, that has been authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law as ...
chartered by a
state government
A government is the system or group of people governing an organized community, generally a State (polity), state.
In the case of its broad associative definition, government normally consists of legislature, executive (government), execu ...
that exists to serve its members in ways other than obtaining and distributing profits to them. Therefore, it cannot obtain
IRS
The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...
501(c)(3)
A 501(c)(3) organization is a United States corporation, Trust (business), trust, unincorporated association or other type of organization exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code. It is one of ...
non-profit status as a
charitable organization
A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being (e.g. educational, Religion, religious or other activities serving the public interest or common good).
The legal definitio ...
.
A mutual-benefit corporation can be non-profit or not-for-profit, but it still must pay regular corporate tax rates. A mutual benefit corporation will pay the same taxes as a regular for-profit corporation, with C corporation tax rates. Mutual benefit corporations must still file tax returns and pay income tax because they are not formed for a purpose from which anyone in the world could benefit. Mutual benefit corporations are formed for nonprofit purposes like managing a condo association, a downtown business district, or a homeowners' association.
A
utility cooperative
A utility cooperative is a type of cooperative that is tasked with the delivery of a public utility such as electricity, water or telecommunications to its members. Profits are either reinvested for infrastructure or distributed to members in t ...
is an example of an MBNC.
See also
*
Civic society
References
External links
Organization of California Nonprofit, No Stockman Corporations(PDF)
{{Charity
*
Public benefit corporations