Business Incorporation: Profit or Non-Profit

         Most corporations provide a service for a price, and use that revenue to stay in business and keep a profit. This is certainly basic information. They have limited liability protection, meaning that directors and officers are not usually responsible for debts or liabilities of the company. This description applies almost every corporation in the marketplace today.

However, there are certain organizations that have a different aim. They may have an educational, charitable, scientific, or religious purpose. In this case, they would state their directive in their Articles of Incorporation. This will define what the corporation is to the state and the IRS. This is simply the first step in creating a Non-Profit and the requirements are different in each state. It is a more complicated process and a Tax Professional will make it easier if they are there from the beginning. But, if this is the area you want to have a corporation in, the work will be well worth the effort. Anthony Sykes & Co will be happy to guide you in the process.

         A word of warning is needed at this point. Many believe that a Non-Profit Corporation is Tax exempt. That is not true. To achieve that status requires approval from the IRS, after a more detailed application submission. To try and create a Non-Profit Corporation which is really For-Profit business is a big mistake. Always know what the goals of your business are and make wise choices to not stray from that purpose. If help is needed, ask sooner rather than later.

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