Nonprofits: The Downside

While there are tremendous advantages to incorporating your business as a nonprofit entity, there are also a few drawbacks. Here’s the downside. You must take these points into account because the paperwork alone is quite a task. If you can manage it, outsource this side of things so you can focus on making your new nonprofit business successful without worrying about minutia.

Nonprofits require money, time, and hard work. Beginning a nonprofit organization takes a lot of dedication to the project. It takes more effort than creating a LLC or other profit corporation – and in the end you’ll probably find it was worth it. It’s a necessary process that you can’t get by without. So, just knock it out!

If you haven’t already enlisted the services of an attorney, skilled in the creation of nonprofit enterprises then you’ll want to do so quickly. Accountants can also save you substantial headaches and should be consulted early on.

To incorporate your nonprofit organization on this site is just $235. Add to that the cost of requesting federal tax exemption from the IRS – which will be $200 to $400 (and changing with time).

Mountains of Paper! State paperwork keeping requirements require a lot of time, effort and attention to detail. There are strict requirements as to formatting, and deadlines to be met for filing with specific governmental agencies. Some nonprofit corps must file IRS Form 990 annually, an additional requirement.

No King, but a Committee. When you create a nonprofit organization you will likely be surprised that you are not in complete control of the company. There are many laws to follow as well as following to the letter your own articles of incorporation and bylaws. Some states require several directors to be appointed – these directors are the only persons that can elect or appoint officers that create the nonprofit policy of operation.

Open to the World. Nonprofit organizations have at their heart a focus on the public interest. All non profit finances are open to the public for inspection at a mutually agreeable time and place.  Salaries and expenses can be obtained by anyone with a desire to see them.

These may look like substantial disadvantages to forming a nonprofit organization – and in truth, they are probably the major reason most entrepreneurs shy away from them. Times are changing, and more nonprofits are being registered in the USA every year.

If you want to begin registering your nonprofit corporation, start here…

Nonprofit incorporation online form >

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Email: Flincorporation@gmail.com
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Benefits of Nonprofit Organizations

Starting a nonprofit company is one of the most rewarding ventures you’ll ever tackle. Nonprofit companies enjoy a plethora of benefits that are not available to other corporate entities. The paperwork and organization of a nonprofit is a lot more difficult than it is for a LLC, or other profit corporation – but, if your business is targeted toward one of the areas acceptable by the IRS to be called “Nonprofit” it’s well worth the effort to incorporate in this manner.

What are some of the benefits of choosing to become a nonprofit?

Some benefits of nonprofits:

Nonprofits can enjoy tax exempt status. If your nonprofit org. qualifies under the IRS 501(c)(3) statutes as a public charity then it’s eligible for federal tax exemption – for federal corporate income tax.

Nonprofits that enjoy this status will likely also enjoy the same benefit at the local and state tax levels. Nonprofits wishing to become tax-exempt must make application to the IRS and to local and state government concerns in order to be awarded tax exempt status. Nonprofits are not automatically tax-exempt!

Nonprofits can get grants from private and public sources. Employees of  Nonprofits can solicit for donations from the public and companies. If individuals contribute to the nonprofit they also benefit through realizing certain tax benefits. There are many companies, foundations, and government groups that limit giving away their grants only to nonprofit charities.

Bill Gates, founder of Microsoft gives away tens of millions of dollars each year to nonprofits. Google, Yahoo, Amazon, and other companies have foundations in place that regularly grant money to nonprofit agencies. Millions and millions of dollars are given away each year by major information technology based companies alone.

Nonprofit organizations are a separate entity from the owners. Owners enjoy some protection of their personal assets in most cases, except those involving intent to deceive, fraud, and other crimes.

Nonprofits enjoy limited liability in court cases. Courts are limited as far as judgment against the nonprofit company. The owners, directors, members and employees are usually not personally responsible for any of hte nonprofit’s debts or liabilities.

Non-profit incorporation is growing every year as more entrepreneurs understand the concept. Nonprofits are an exceptional way to go… they provide people that need help with resources, money, and tools that they would not have had otherwise. The government recognizes nonprofits and holds them in very high regard, bestowing on them many benefits that other companies (corporate entities) don’t enjoy.

What are you waiting for? Start on your nonprofit corporation today by filling out our nonprofit form here >

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Call Toll Free: 888-905-7380
Email: Flincorporation@gmail.com
Question or Comment? Support Form

Non Profit Corporation Online Form

Here is a link to our online form for incorporating as a “NON PROFIT CORPORATION” in the state of Georgia:

Georgia Nonprofit Organization form >

Here is a link to find out more about the benefits of incorporating as a nonprofit organization:

Benefits of incorporating as a nonprofit organization >

Here are some drawbacks to incorporatign as a nonprofit. Primarily, paperwork is the big draw back.

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Call Toll Free: 888-905-7380
Email: Flincorporation@gmail.com
Question or Comment? Support Form

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