Non-Profit Corporation Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Non-Profit Corporation, written in plain English, along with examples of how it is used.
What is Non-Profit Corporation?
It refers to those organizations which are formed with the permission from the state and tax authorities to perform activities within organisation for certain cause like, education, hospital, religious purpose or charitable, with non commercial services. The directors or trustees of such organization do not wrk for profit and they are paid reasonable salaries for their services.They are also given the tax free status.
History and Meaning of Non-Profit Corporation
A non-profit corporation is an organization that is formed for a specific purpose other than making profit. The organization works towards certain objectives such as education, religion, charity etc. The organization is formed with permission from the state and tax authorities and the directors, or trustees of the non-profit do not work for profit. They are allowed to take reasonable salaries for their services while maintaining the tax-free status of the organization.
Non-profits have been historically significant since ancient times when organisations such as churches and temples were formed for religious purposes. Later on, various charitable groups were formed that fell in the category of 'non-profit' as they were not formed to make profit but to provide aid to individuals or groups of people in need.
Examples of Non-Profit Corporation
- The American Cancer Society is a non-profit organization that aims to raise awareness about cancer and increase funding for cancer research.
- Oxfam International is a confederation of 20 independent charitable organizations that help people lift themselves out of poverty.
- The Make-A-Wish Foundation is a non-profit organization that focuses on fulfilling the wishes of children with critical illnesses.
Legal Terms Similar to Non-Profit Corporation
- Charity: a non-profit organization whose purpose is to benefit the public or a specific group of people, such as a school or hospital.
- Corporation: a legal entity that is created to conduct business or other activities, which can also be non-profit.
- Association: a group of people who come together to form an organization or club to pursue a common objective.
- Trust: a legal arrangement in which a person or entity holds property or assets on behalf of others. Trusts can also be formed for charitable purposes.