Define: Non-Profit Corporation

A non-profit corporation is a type of legal entity that is organised for purposes other than generating profit for its owners or shareholders. Non-profit corporations are typically established to serve charitable, educational, religious, scientific, or social welfare purposes. Unlike for-profit corporations, which distribute profits to shareholders, non-profit corporations reinvest any surplus income back into their mission or activities to further their charitable objectives. Non-profit corporations are governed by specific laws and regulations that vary by jurisdiction, but they generally must comply with requirements related to tax-exempt status, governance, reporting, and accountability. Non-profit corporations may be eligible for tax-exempt status under the Internal Revenue Code, allowing them to receive donations and grants that are tax-deductible for donors. Additionally, non-profit corporations may be subject to oversight by government agencies or regulatory bodies to ensure compliance with applicable laws and regulations. Non-profit corporations play a vital role in addressing social needs, advancing public causes, and promoting the public good through their charitable activities and services.

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This glossary post was last updated: 29th March 2024.