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[kevin oleary]
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LSDefine
Simple English definitions for legal terms
non-profit corporation
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A quick definition of non-profit corporation:
A non-profit corporation is a type of organization that is approved by the state to operate for educational, charitable, social, religious, civic, or humanitarian purposes. It is formed by a group of people called incorporators, who appoint a board of directors and officers to run the organization. Unlike a regular corporation, a non-profit corporation does not have shareholders who receive profits. Instead, any money earned is used to further the organization's mission. The people who work for the organization, such as the officers and management, may receive reasonable salaries for their services. When a non-profit corporation is dissolved, its assets must be given to another organization with similar goals. To be recognized as a non-profit corporation by the government, the organization must apply for a special status and file annual tax returns. The government also has the power to make sure the organization is following the rules and not using its resources for personal gain.
A more thorough explanation:
A non-profit corporation is an organization that is approved by the state's Secretary of State and taxing authority to operate for educational, charitable, social, religious, civic, or humanitarian purposes. It is formed by incorporators, has a board of directors and officers, but no shareholders. The purpose of a non-profit corporation is to serve the community and not to make a profit.
- A charity that provides food and shelter to the homeless
- A school that provides education to underprivileged children
- A religious organization that provides spiritual guidance and support to its members
- A community center that provides recreational activities and services to the community
These examples illustrate the definition of a non-profit corporation because they are all organizations that operate for a specific purpose that benefits the community. They do not have shareholders and any profits made are used to further their mission rather than being distributed to individuals.
In order to be recognized as a non-profit corporation, the organization must apply for approval from the state and the IRS. They must also file annual tax returns and ensure that they are abiding by state laws and regulations.