nonprofit corporation


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nonprofit corporation

n. an organization incorporated under state laws and approved by both the state's Secretary of State and its taxing authority as operating for educational, charitable, social, religious, civic or humanitarian purposes. A nonprofit corporation (also called "not for profit corporation") is formed by incorporators, has a board of directors and officers, but no shareholders. These incorporators, directors and officers may not receive a distribution of (any money from) profits, but officers and management may be paid reasonable salaries for services to the corporation. Upon dissolution of a nonprofit corporation its assets must be distributed to an organization existing for similar purposes under the "cy pres doctrine." In order for contributions to the corporation to be deductible as charitable gifts on federal income taxes, the corporation must submit a detailed application (with a substantial fee) for an Internal Revenue Service ruling that it is established for one of the specific nonprofit purposes spelled out in the Internal Revenue Code. Informational tax returns must be filed annually with the IRS and the state taxing body. In addition, the state Attorney General may have oversight powers to determine if the corporation is abiding by state laws by limiting its activities to its approved nonprofit purposes, and not milking the corporation for disguised profits. (See: corporation, charity)

References in periodicals archive ?
The Act also provides that a nonprofit corporation may "eliminate or limit the liability of a director to the nonprofit corporation or to its members for monetary damages for any action taken or any failure to take any action as a director" if so provided in the articles of incorporation, bylaws or a resolution ([section] 16-6a-823(1)(a), Utah Code Ann.
This volume, written by the Committee on Nonprofit Corporations of the American Bar Association's Business Law Section, covers many of the general legal issues found in Nonprofit Governance and Management.
The church's nonprofit corporation, the Wheat Street Charitable Foundation, owns and manages two housing developments, several single-family dwellings and an office building.
Neighborhood Empowerment and Economic Development or NEED, a San Fernando Valley nonprofit corporation, is the managing general partner of the group that bought the property.
Federal and state laws allow tax exempt groups like VIP - a 501(c)(4) nonprofit corporation - to advocate issues and ballot measures, as long as political activity does not become the organization's primary function.
The Valley Economic Development Center is a community-based nonprofit corporation which offers training, consulting, technical assistance and financing to small- and medium-size businesses.

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