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Extra info for The Complete Guide to Nonprofit Corporations/Step-By-Step Guidelines, Procedures and Forms to Maintain a Nonprofit Corporation

Sample text

The Company Corporation will receive any legal documents served on your corporation in Delaware, including those relating to lawsuits, and will forward these to the business address of your corporation. The Company Corporation will refer you to competent Delaware lawyers if legal counseling or advice is requested on any corporate matter. They will also provide a variety of other business services and materials. For instance, The Company Corporation can supply you with printed membership certificates, a corporate seal and legal forms for minutes and bylaws if you wish to order these materials.

A certain amount of unrelated business income is not prohibited for tax-exempt organizations, but, where it exists, Section 511 denies the benefit of exemption from taxation. Internal Revenue Code Section 512 defines unrelated business activities as those that bear no direct relationship to the exempt purposes of the nonprofit corporation. For example, a workshop operated to provide jobs for handicapped people who are the beneficiaries of the corporation would certainly qualify as a related business activity.

But they are not deductible as charitable contributions on a personal income tax return. Organizations Eligible for Tax Exemption Here are all the types of corporations and organizations eligible for tax-exempt status, as described in Section 501 of the Revenue Code. As you study this listing, try to decide which numerical category best describes your nonprofit corporation. As you will see in Chapter 12, the category under which you seek exempt status determines which IRS form is required. < previous page page_45 next page > < previous page page_46 next page > Page 46 Applicable Section of General Nature of IRC Description of the Type of Organization Its Activities 501(c)(1) Corporations organized under Act of Instrumentalities of Congress including Federal Credit Unions the United States 501(c)(2) Title-holdingcorporations for exempt organizations Holding title to property of an exempt organization Organizations that are religious, educational, charitable, scientific or literary in nature, or that are involved in testing for public safety, fostering certain national or international amateur sports competitions, or preventing cruelty to children or animals As implied by the description of the specific class of organization Civic leagues, social welfare organizations and local associations Promotion of community welfare; charitable, educational or of employees' recreational functions Labor, agricultural and horticultural organizations Educational or instructive, the purpose being to improve conditions of work and to improve product and efficiency 501(c)(3) 501(c)(4) 501(c)(5) 501(c)(6) Business leagues,chambers of commerce, Improvement of real estate boards, etc.

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