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Updated: Sep 11, 2018


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If your organization is involved primarily in educational, scientific, religious, or charitable endeavors, you'll probably want to form a nonprofit corporation for the liability protections and tax advantages this status provides.

How to Start A Nonprofit Organization

Incorporating your nonprofit will set legal protections in place that can keep you and your directors' personal assets separate from the company's liabilities. There are a number of other benefits to forming a nonprofit, as well.

In general, nonprofit corporations enjoy the following benefits:

  • Limited liability protection. Directors and officers are not personally liable for the organization's debts and liabilities.

  • Perpetual existence. The corporation continues even if a director leaves the business or passes away.

  • Eligibility for grants. Nonprofits may be eligible for certain public and private grants.

While nonprofits are bound by different state laws than for-profit enterprises, in general their formation processes are quite similar. Like a regular corporation, nonprofits must file Articles of Incorporation with the state in which they wish to incorporate.

Nonprofit Tax Forms

In addition, the IRS requires nonprofit organizations seeking tax-exempt status to file Form 1023. Several states also require organizations to file for state-level tax-exemption. The nonprofit status most commonly sought by organizations is the Internal Revenue Service's 501(c) tax-exempt status. Organizations that qualify for 501(c) status enjoy the following advantages:

  • Tax-exempt status. Qualifying nonprofits can apply for federal and state tax-exempt status

  • Enhanced credibility. Potential donors may be more inclined to give to an organization that has an official nonprofit status

  • Tax-deductible donations. Donations made by individuals to the nonprofit corporation may be tax-deductible

  • Possible exemption. from certain property taxes.

  • Reduced postage rates.

www.KenGordonPA.com Can Help Nonprofit Incorporation

Ken Gordon can help you form a nonprofit corporation and assist your nonprofit by providing the forms necessary for it to obtain tax-exempt 501(c) status with the IRS.




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