Forming a Non-Profit Corporation or Tax Exempt CorporationA Nonprofit Corporation ("Nonprofit") is a Nonstock Corporation that uses the Corporation's profits to help achieve a charitable purpose. In terms of the structure and liability, with some specific exceptions, protection is roughly identical to a For-profit Corporation. However, a Nonprofit has different rules regarding taxation. Generally, a Nonprofit does not have to pay many of the taxes that a For-profit Corporation furnishes.
In terms of state taxes, a Nonprofit should register with the appropriate state agency to receive a Sales and Use Tax Exemption. In Virginia, this exemption is applied for via the Virginia Department of Taxation's Sales and Use Tax Exemption. Further, a Nonprofit, depending on its purpose and other factors, may apply forFederal 501(c) Tax Exempt Status with the IRS via IRS Form 1023. Lastly, most states require that a Charitable Solicitation License ("License") be filed with a specified state agency in order to solicit contributions; failure to do so when soliciting contributions is unlawful and may be punished criminally. In Virginia, a Nonprofit soliciting contributions must register with the Virginia Department of Agriculture and Consumer Services via the department's Form 102. These filings can be extremely complex and lengthy and it is strongly recommended that you consult an experienced attorney who is familiar with the process.
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To receive world-class service for your legal matter, call a McClanahan Powers Nonprofit Law Attorney at 703-520-1326. Or, to send an e-mail, please complete and submit the online form on this website. Flexible appointment times and payment options are available.