|Forming a non profit. By Tracy O|
These are formed for civic, educational, charitable, and religious purposes and enjoy tax-exempt status and limited personal liability. (SBA)
The major advantage of non profit is the ability to file for tax-exemption from income tax and for some charitable organizations, property taxes. It does not make them exempt from employment taxes. Other advantages are the limited liability and starting a nonprofit may qualify you for grants and other financial assistance.
Starting a corporation can be a tedious task and making sure that your business structure is set up correctly and meet the many legal requirements can be overwhelming. Seeking the assistance of an attorney will not only help you make an inform decision but will also make sure that you are in compliance with the state and federal government.
Keep In Mind
This is the end of the three part discussion on different business structures. When trying to figure out which entity is best for you and your business, keep the following in mind:
- Your Business goals
- Business structure-How do you want your business structured?
- Business legal vulnerabilities- Are you entering a high-risk business that may make your business vulnerable to lawsuits?
- Tax effects- What are the tax implications and which entity offers the best tax benefits.
- Profit/Loss projection and investment
- Start Up cost
- Ease of ending business
Make sure to visit your secretary of state website for state specific requirements for starting a business in your state.
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