What are the disadvantages of forming a nonprofit corporation?
The main disadvantage of forming a nonprofit company is the increased paperwork that is required. Articles of incorporation must be filed with the state, bylaws prepared, and meeting minutes must be kept with your corporations records. Business Filings Incorporated can help with these steps by preparing and filing your incorporation papers, and our nonprofit kit contains sample bylaws and meeting minutes. Also, applications for tax-exempt status must be filed at both the federal and state levels. Business Filings does not prepare the necessary federal or state tax forms; therefore you will need to complete this process separately. It is important to remember that nonprofits cannot be used to generate profits for the owners, and the purpose must conform to IRS regulations.
The main disadvantage of forming a nonprofit company is the increased paperwork that is required. Articles of incorporation must be filed with the state, bylaws prepared, and meeting minutes must be kept with your corporation’s records. Incorporate1 Online Incorporated can help with these steps by preparing and filing your incorporation papers, and our nonprofit kit contains sample bylaws and meeting minutes. Also, applications for tax-exempt status must be filed at both the federal and state levels. Incorporate1 Online does not prepare the necessary federal or state tax forms; therefore you will need to complete this process separately. It is important to remember that nonprofits cannot be used to generate profits for the owners, and the purpose must conform to IRS regulations.
• There is more intricacy (preparing articles) and expense (state fees) when forming a corporation. • There are more extensive bookkeeping requirements. Bylaws prepared, and meeting minutes must be kept with your corporation’s records. A File My Business Corporate Kit can help with this. • When operating a business in many different states your corporation may be required to file certificates of authority in those states. File My Business can handle these additional filings for you. • The purpose of your nonprofit must meet IRS regulations • Tax-exempt applications must be filed on both the federal and state levels.
