A nonprofit corporation generally denotes an incorporated association or foundation established under Article 34 of the Civil Code. The main requirements for a nonprofit corporation are: first, it performs operations related to the public interest, or benefit for many and unspecified people; second, it does not aim at making profits and third, it has to obtain the permission of the competent authorities, etc. The article provides that such a corporation can conduct operations related to festivals, religion, charity, science, the arts, or other activities. Labor unions, cooperatives and other organizations situated between joint-stock and private companies based on the Commercial Code and the Private Company Law and nonprofit corporations based on the Civil Code are not operated for the public interest. They are incorporated under specific laws, such as the Labor Union Law and the Cooperation Association Law. Existing laws, however, make no provision in general for the incorporation of nonprofit organizations operated in the interest of specific people.
Legal entity authorized by state law allowing people to unite for the purpose of either benefiting members of an organization or for some other public benefit. Nonprofit corporations can make a profit, but the business cannot be designed primarily for profit-making purposes, and the profits must be used for the benefit of the organization or purpose the corporation was created to help. Remaining assets must be distributed to another nonprofit, not to board members, upon dissolution of a non-profit organization. Nonprofit corporations usually qualify for a federal tax exemption under § 501(c)(3) of the Internal Revenue Code, with the result that all contributions to the nonprofit are tax deductible by their donors.
(Not-for-profit corporation) A nonprofit corporation is generally organized for some socially beneficial purpose, rather than for the direct monetary benefit of the shareholders or members. Not all nonprofit corporations are tax-exempt, and some make a profit; however, the profit is not distributed to the owners. To receive tax-exempt status, the corporation must submit a written application to the federal and state tax agencies and meet certain requirements relating to the distribution of its assets and profits as well as other requirements. To learn more about nonprofit corporations, click here.