May a non-profit corporation pay compensation to its officers, directors and/or employees?
Yes, a non-profit corporation may pay a reasonable salary to its officers, directors and/or employees for services rendered to the non-profit corporation and associated to its exempt purpose. How many directors or officers are non-profit corporations required to have? The majority of states require Non-Profit Corporations to have a minimum of three directors. However, some states allow for less than three directors. A small number of states require only one director Is “Non-profit” the same as “Tax-Exempt”? Absolutely not. Being formed as a non-profit corporation does not automatically mean that the corporation is tax-exempt for federal and, in some instances, state income tax. A “tax-exempt” corporation is a distinctive entity that has gained an exemption from income tax liability. A non-profit corporation is not eligible for exemption from income tax liability until it applies for and has been approved by the IRS for tax-exempt status. How are my Income Taxes and Accounting prepared?
