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Non Profit Corporation
To qualify as a non-profit corporation, the company must have an ultimate purpose, specified by law, such as a charitable, educational, civic, religious, or cultural purpose. The main difference between a non-profit corporation and a general business corporation is that a non-profit corporation has members who receive certificates of membership rather than shares. The profits and properties of the corporation do not belong to the members. The non-profit corporation is formed at the state level. Many non-profit corporations are tax-exempt; however, merely forming a non-profit corporation does not guarantee that the state or federal government will treat the organization as tax exempt. Separate qualifications are required for tax-exempt status.
501 (c) 3 Non Profits
Under the 501(c) 3 election, the non-profit corporation is not only tax exempt from paying taxes, but it can also write receipts to patrons of the organization that are 100% tax deductible. For example: If John Smith donates $1,000 to ABC, Inc.(501(c) 3) then ABC, Inc. can in return write John Smith a receipt for the $1,000 donated to be written off on his current yearly tax returns. Donations are not limited to monetary donations but may include boats, cars, clothing, etc.