Non-Profit Corporation

Non-Profit Corporation

A non-profit corporation is an incorporated organization that is created by government or judicial authority and registered at the Registry of Commerce. Non-profit corporations are not intended to provide profit to the owners and members unlike for-profit organizations whose main directive is to provide members and owners with a profit. Non-profit corporations are always organized as a non-stock corporation. A non-stock corporation does not have owners that are represented by shares of stock.

The purpose of a non-profit corporation is usually educational, charitable, religious or related to numerous other purposes. They may also be a foundation, a charity or other type of non-profit organization. Non-profit organizations that incorporate themselves are agreeing to a legally binding contract and the corporation is subject to the same general laws of corporations. In some cases, the non-profit corporation may also be a public corporation. Also as with other non-profit organizations, the rules and regulations regarding the non-profit corporation may differ in different countries and will usually follow those countries regulations for corporations.

One problem that non-profit corporations run into is their inability to fund growth from profits. This is how general corporations would fund their growth. But some corporations have overcome this problem by establishing a capital development fund. Contributions that were deemed to be costs and the investment of the funds were restricted to only the loan stock bonds.

In a non-profit corporation, the corporation is a legal entity that has a separate legal personality from its members. This means the corporation has the right to sue, and be sued, has the ability to hold assets in its own name has the ability to hire agents, the ability to sign contracts and the ability to create by-laws that govern its internal affairs. Corporations are the most common modern business. Corporations have a limited liability by their owners and members. This means is a corporation is sued, it is the business itself that is sued, not the owners or the members. The business is held accountable. Conventions of corporate governing commonly appear in a variety of business and activities for non-profits. Courts often apply the same interpretation of provisions of the law to both the non-profit corporation and the for profit corporation.

Stephanie Z. is a writer for
Article Research & Revisions Funded by:
Roger Bryan
National Charity Services

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