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Ready to Get Started?

Are you ready to form your Nonprofit Corporation?

To begin, give us a call at 1-800-254-5779

Download PDF Application

Please save the form to your computer, you can send the form to us via E-Mail when completed.

501(c)(3) Nonprofit Corporation

Nonprofit corporations do share some common attributes with profit corporations-for example, limited liability. However, there are many advantages to forming a tax-exempt 501(c)(3) nonprofit corporation. Tax exemptions, receiving public and private funds, separate and perpetual legal existence, employee benefits, formality and structure as well as many other advantages. To qualify for your federal nonprofit tax exemption, you will want to organize and operate your nonprofit corporation for Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals.

The 501(c)(3) Nonprofit Corporation offers federal corporate income tax exemption under Section 501(c)(3) of the Internal Revenue code. IRC § 501(c)(3) nonprofits must be organized for religious, charitable, educational, scientific or literary purposes. This entity is not only exempt from corporate taxation under federal and state tax statutes, but also eligible to obtain tax-deductible contributions from donors and other benefits not available to other tax-exempt nonprofit organizations.

Advantages

  • Tax exemptions – eligible for state and federal exemptions from payment of corporate income taxes, as well as other tax exemptions and benefits.
  • Receiving Public and Private Funds – eligible to receive both public and private grants.
  • Limited liability – directors, trustees, officers, employees and members are not personally liable for corporate debts or liabilities.
  • Separate legal existence – a nonprofit corporation is a legal entity separate from the people who manage and work for it, or participate in its activities-a legal “person,” capable of entering into contracts, incurring debts, receiving and maintaining funds, and, generally, doing anything a real person can do.
  • Continuity of life – exists as a legal entity despite changes in management or other corporate personnel caused by the resignation, removal or death of the people associated with it.
  • Employee benefits – the principals can also be employees and, therefore, be eligible for employee fringe benefits.
  • Formality and Structure – the formation documents show clear-cut delegation of authority and specific operating rules to run the organization providing procedures for decision-making and dispute resolution.
  • Additional benefits – lower postal rates, cheaper advertising rates, free radio/television public service announcements, lower membership rates offered by the “big box” stores.

Disadvantages

  • Paperwork – requirements regarding the organizational paperwork including additional fees, compliance with the day-to-day operational rules and, required periodic filings with state and federal agencies.
  • Governance responsibilities:

    -Acquisition of sufficient resources to enable the organization to fulfill its mission – Clearly articulated goals and objectives, a positive public image, strategic planning, and collaborative endeavors contribute to an organization’s capacity for attracting resources.  Organizations lacking in these areas encounter difficulties in raising funds and volunteers to support their cause.

    -Sound administrative practices, professionalism among staff, good internal and external communications, and effective board governance contribute to the overall health and well being of the nonprofit. Organizations that do not use their resources effectively limit their ability to make a social impact on society.

    -The boards of nonprofit organizations can either be part of the problem or part of the solution with respect to the acquisition of resources or use of existing resources.

  • Fund Raising – scrutiny by the public, the donors supporting the cause, governmental agencies and the fund-raising community have demanded cost efficiency (percent of budget used for fund raising) to determine the effectiveness of a nonprofit organization and also as an indicator of fraud.

Tax Implications

  • Must file IRS Form 990 (or Form 990-EZ), annual Return of Organization Exempt From Income Tax.
  • State Nonprofit Corporation Tax Returns and Reports are also required.
  • Federal and state employment (payroll) taxes must be withheld and paid on behalf of the employees.
  • Corporate staff and other compensated corporate personnel must report and pay taxes on employment compensation on their individual income tax returns.
  • Sales, Use, Excise and other state taxes may apply (some exemptions may be available).

Ready to Get Started?

Are you ready to form your Nonprofit Corporation?

To begin, give us a call at 1-800-254-5779

Download PDF Application

Please save the form to your computer, you can send the form to us via E-Mail when completed.

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Utilizing our wealth of information from our staff. You can rest assured that we provide education for your success!

What People Say About Us

Thank you for your informative, engaging, and very valuable presentation at the ANN Reno Conference for Nonprofits. "The Keys to Successful Nonprofit organization will be critical to the success of our fledgling nonprofit. Your presentation style is extremely effective and furthered networking among those attending the conference, Thank You! I appreciate your generosity in sharing your time and expertise with us at the conference.
Kay Gore
For six years we have listened, learned and implemented all of your strategies and advice. I can’t even begin to tell you how fantastic it is to actually see the results we have produced and are getting closer and closer to our financial freedom day.
Forrest & Anna Cummings, Silver Springs NV
I can honestly say that when you speak you have such an amazing ability to make everyone in the room feel comfortable. You are open, honest, funny and brilliant! It is a delight to learn from you and I always walk away with a new ah ha!
Doug Hixson, Reno NV
My wife and I took the class on the Language of Money last Saturday and heard you speak. To be honest with you, both my wife and I wished that you had done the entire class! We found the info you had presented both interesting and hopeful that there is something we can do to protect our business and our money from getting consumed by the IRS.
Steve & Christine Sanders, Sacramento CA
I wish that I could move the clock back 10 years so that I could work as an intern under Cheri S. Hill.
Zenzo Tazawa - Santa Rosa CA
I read Incorporate and Grow Rich in 2005 and took advantage of Sage International’s services to create www.transguardian.com, an online logistic and insurance management corporation. We went from bootstraps capitol in a spare room to a downtown office with revenue of seven figures in three years. We have always had complex needs, and Sage has always had intelligent, innovative and highly practical answers. Now with double digit growth in spite of an adverse economy, our questions are even more complex and sophisticated, and Sage continues to offer solutions that are flexible, workable and creative as we are. We’ve sent perhaps a dozen clients to Sage over the last few years, and, without exception, everyone of them has thanked us profusely for the recommendation.
Jim Moseley
Cheri, I cannot tell you how much I enjoyed listening to your and Pragito's insights and advice. It really spoke to my heart, and gave me some awesome tools to use to overcome my fears and negative thoughts about my ability to make this new business work, and fulfill my dream of having a more flexible schedule to spend more time with my family. I have signed up for her newsletter.
Christine Wyman
Northern Nevada Metro Woman
Cheri, I can’t express enough how much I appreciate your time, energy, and knowledge. Your support of ProNet Reno is nothing less than phenomenal.
Pieter Droog
ProNet Reno
Dear Cheri, I wanted to thank you for speaking at the Sparks Power Players. I have to say that most of the meetings I have gone to for other organizations are usually very boring and do not pertain to me, but today was great! I got so much out of the material that you presented to us. I want to thank you for your passion and heart for helping companies not only survive, but thrive. I am very excited to apply what I learned today to our business and see the results. Again thank you for your time.
Duane Lee
Moving Consultant
I loved your article in the Northern Nevada Business Weekly about "Sparking Creativity". You make some really great points about the importance of investing in your creative core. For years I have followed the Artists Way and all the books by Julia Cameron, you must be familiar with her work. As an Interior Designer, I love that I am rewarded for my creative ideas and designs. Your article made me smile, gave me some great ideas about how to live a creative life and I wanted to thank you.
Marilee Wintz
I received my minute book and had Danielle give me a walk through. I gave her 5 stars afterwards and One Bravo! Cheri, I give out Few Roses, however in your case you get a Dozen ! I am really looking forward to working along with you in the very near future . Thank you from the bottom of my Dinosaur Heart.
Robert Bingham