A non-profit organization or foundation is an organization that works for the betterment of the people without any charges from them. The non-profit organization is also known as the non-business entity, which is not for the profit-making activity. These businesses are legal, and these are operated for some collective, social or public benefit. They do not work to make profits like the other business that aims for profits only. A non-profit organization is exempted or granted the tax exemption, which means they do not have to pay any tax because it works for the social cause and works for the public benefit.
These organizations do not work to earn profits. Instead, they donate the money and help the people in need, just like the Tej Kohli foundation operated by the Philanthropist Tej Kohli. This organization has done so many things for the poor people around the work. Even global crises like the coronavirus have helped a lot of people; they have provided people food who has stuck in their hoses during the lockdown. Forming an organization which a non-profit can also have so many benefits, which we are going to study about later.
Benefits of forming the non-profit organization
Here are some of the points that may help you in understanding the things that how can a company which does not work for any profits have benefits. Some of those benefits are mentioned below-
- If we talk about the business’s existence, then a non-profit organization has its own separate entity or existence. They can sue and be sued in their own name and can enter into any of the contracts. They are the only one who is responsible for their company’s liability and debts.
- The company has limited liability protection; for any type of debt or liability, the company protects its officers, directors, and members. These people are not responsible for paying them, and an informal organization does not work like that.
- The best part of these non-profit organizations is that they do not have to pay any tax. As a non-profit organization, it does not earn any profits, and they do not have to pay the tax on their income because all they do is donate the money and help people in need.
- There is some of the non-profit organization which is eligible to accept the grants from the public or private; it makes it a lot more easy to get the capital for operating. In this way, they do not have to pay any tax on the sales and the property.
- The non-profit organizations have to appoint the [professional register agent who handles all the things. This person ensures that all the things are treated properly and handling the time-sensitive court documents in case this organization has sued.
So a person may get the idea from the above points that forming a non-profit organization can be beneficial for the people. But a person has to do so many things to start this organization and work efficiently according to the laws.