Starting a business with a cause offers much satisfaction as you work to make lives better for others.
To launch a nonprofit corporation, it requires taking many of the same steps a for-profit corporation or LLC does, but there are differences, too. Nonprofits must comply with some requirements that don’t affect other businesses. So, where do you begin?
1. Understand what it means to be a nonprofit.
A nonprofit may be created a nonprofit for charitable, educational or certain other Purposes — as long as they don’t directly benefit the owner. Nonprofits (if approved by the federal government) operate tax free, and they can accept donations and apply for grants.
While a nonprofit business can make profits, surpluses must be used toward fulfilling The organization’s objectives — such as buying computer software to run the business more efficiently or investing in resources that deliver value to those that it serves.
2. Choose a legal structure.
Most nonprofits choose to register as a 501(c)(3) corporation. The 501(c)(3) classification includes organizations that have a charitable, educational, religious, scientific, or literary purpose.
Like corporations or LLCs, owners of nonprofit corporations receive personal liability protection because the business is a completely separate legal entity. A nonprofit must make sure it meets all business compliance requirements (such as keeping business licenses current, paying taxes, filing reports, etc.) to maintain that…
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