Considered Non-Profit

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What is Required for a Corporation to Be Considered Non-Profit?
Many entrepreneurs and business people are understandably confused about what is required for a corporation to be considered non-profit. A nonprofit corporation, or 501(c)(3), is a charitable organization that is recognized by the IRS. Non-profits do not pay income tax on its earnings or donations. Whenever people donate to a non-profit, they can reduce their taxable income through itemized deductions.
Why Form a Non-profit?
The primary reason people form a non-profit is to pursue a charitable goal or mission. Non-profits are one of the essential sources of support for social harmony and economic stability. A non-profit organization doesn’t have to be recognized by the IRS to pursue charitable work. However, the public will be motivated to donate if they can benefit from tax deductions. Obtaining the IRS-approved 501(c)(3) status means that the public will view the organization as legitimate. The IRS requires that non-profits report most of their financial and operating information, so this becomes public record available for scrutiny and accountability. Filing for 501(c)(3) is important because the incorporation process legally protects the owners personal assets.
501(c)(3) Regulations
The IRS states that organizations that wish to
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However, non-profits must follow additional steps to apply for tax-exempt status with the IRS and their state’s tax department. First, they must choose an available and appropriate business name that meets their state’s legal requirements. Next, they must file the articles of incorporation, pay a filing fee and apply for federal and state tax exemptions. Then, they will establish their corporate bylaws, which will spell out the operating rules, and appoint the organization’s directors. Certain states require non-profits to choose the directors before filing the articles of
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