What is a Non-Profit?
A non-profit organization is an entity that serves the public or advocates for a social cause and therefore receives tax-exempt status from the IRS. According to the IRS, categories that qualify as a non-profit include:
- Charitable or religious organizations
- Social welfare organizations
- Labor and agricultural organizations
- Business leagues
- Veteran organizations
What are the benefits of a non-profit?
As stated above, non-profit organizations are tax-exempt. People who donate to a non-profit can write off their donations, and the non-profit is exempt from paying taxes on the donations it receives. Non-profits may also be eligible for public and private grants.
How to Incorporate a Non-profit
Starting a non-profit is similar to any other LLC with the additional step of applying for tax-exempt status.
- Choose a name
- Appoint a board of directors
- Decide whether the company will be a trust, corporation, or association
- File incorporation paperwork to your state
- Apply for tax-exempt status with the state and the IRS. The IRS’s website has forms for each type of non-profit organization. These forms can be filled out online. The IRS website has online courses and workshops to help users understand the process.
- Confirm that your organization has acquired the necessary licenses and permits
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