Business Law
A Non-Profit Organization is 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. The incorporators,
directors and officers of the organization 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.
