501(c)(3) Corporation Formation
Nonprofit corporations play an enormous part in our society.
Traditionally, they fill the gap between the government's provision and
society's need. In providing such a valuable service to the community,
nonprofit corporations may operate free from income tax. There are
many types of nonprofit corporations. The most common type of nonprofit
corporation is exempt under Section 501(c)(3) of the Internal Revenue
Code. 501(c)(3) nonprofits are the most common because they provide
for the broadest range of permissible activities, and they provide the
greatest tax benefit to donors.
a nonprofit corporation allows the directors and officers of the corporation
to offer a service or a program to the community, or to a group of people
without paying taxes on the money that it receives. Additionally,
tax-exempt status makes it very easy to receive cash and in-kind sponsorships,
grants, and donations because of three main reasons:
sponsorship programs of the major corporations;
need for the government to have an organization that offers a particular
tax deductions available to the donors.
can use those grants, and other donations, to operate a special program
that the community needs. The recent trend is for employees that
have been downsized, or are otherwise out of work, to create their own
employment opportunities by forming a nonprofit corporation. The
nonprofit corporation may:
salaries to employees;
the required board meetings anywhere;
health and other benefits, and perks (club memberships, special events,
employees for expenses incurred during
501(c)(3) programs include:
and elder care
skills, life skills, & convict re-entry
awareness, education, and assistance, and
type of program that helps to relieve disadvantaged community members.
corporations are also allowed to generate revenue, provide services for
a fee, and sell products that relate to some form of community service.
The revenues generated in this way are all tax-free. Nonprofit corporations
are an attractive alternative to traditional for-profit businesses because
they are allowed to pay salaries, provide comprehensive benefits, and
offer other perks associated with 'normal' employment.
prosperous for-profit companies have a nonprofit "sister". And while
the nonprofit must use their resources for a community service, nothing
prevents the nonprofit from referring business to, or even subcontracting,
for-profit businesses to perform some function(s).
the business executive, CEO Services Group
will form the nonprofit corporation, secure the applicable tax exemptions,
and provide detailed guidance regarding how to grow your business and
fill a need in the community at the same time. Contact CEO
Services Group for more information.