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If your new business surrounds a charitable cause, then you may be considering forming as a non-profit organization. A state-recognized non-profit organization has the benefits of obtaining private and public grants, utilizing lower postage rates, and earning exemption from income, sales and property taxes. Granted, non-profit organizations as formal entities require more paperwork, filings, and regulation, however the benefits can far outway the costs.
Organizing as a non-profit corporation allows other individuals and businesses to donate money tax-free, and your organization will shield you from personal liability. There are specific tax laws regulated by the IRS regarding non-profit organizations. For companies interested in becoming a non-profit organization, it is important to get sound advice from a qualified accountant or tax attorney. The laws regarding non-profit sector businesses are intricate and should be approached with care. |
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