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.