Choosing to run a non-profit business can be a fulfilling and life-changing career move for individuals who want to use their talents to work toward goals other than the bottom line. Whether you are starting a new business and filing for a California seller's permit for the first time, or if you want to reorganize your existing business, understanding the benefits can help you make the right decision for your organization.
State and federal agencies want to promote and support nonprofits, so these programs and financial advantages are designed to make it easier to run a non-profit organization.
Non-Profit Benefits Your Business Could Enjoy:
1. Protecting Yourself with Limited Liability
Doing good in the world comes with some risk. Even if the primary focus of your activities is charitable in nature, you might incur some liability in the course of doing business. Organizing as a non-profit LLC will offer protection against personal liability.
Can an LLC be non-profit? Many states already allow non-profit businesses to organize as a Limited Liability Corporation, and more are adding the option each year.
2. Securing the Legacy You Create
Investing your personal effort and expertise into forming a nonprofit business or philanthropic organization should have a lasting impact that goes on after you step away from leadership. Formal organization preserves the legacy built through continuous planning, organizing, and fundraising.
What is a non-profit business, exactly? It can be as small as a local soup kitchen or as large as the PGA TOUR, which raises millions each year for charitable organizations.
3. Establishing Separate Entity Status
With an understanding of how to start a nonprofit business, that entity can then enter into contracts, secure financing, obtain insurance, and, if necessary, sue or be sued for debt collection or other financial obligations. This allows organization leaders to leverage new resources without becoming personally liable for the debts of the organization.
4. Maintaining Tax-Exempt Status
One of the reasons for starting a nonprofit in California is to apply for federal and state tax-exempt status. You may also be eligible for a state sales tax and/or property tax exemption. These exemptions are designed to protect the fund-raising efforts of your corporation.
5. Obtaining Access to Grants
Obtaining federal and state grants or other public allocations are often essential to starting a nonprofit business. Most of these financial opportunities are limited to formally organized and registered entities, making this a common reason why you start a nonprofit in the first place.
6. Making Tax-Deductible Donations
When weighing the pros and cons of non-profit organization status, consider whether one of your primary functions is to make donations to individuals or charitable organizations. If so, keeping those donations tax-deductible, as well as receiving discounts on postage, bulk mailing, and other government services just might tip the scales.
How to Start a Non-Profit Organization in California
If you are wondering how to start a nonprofit in California to secure your business name, credibility, and access to government grants and loans, FastFilings can help. With fast and private online filing services, we file all permit and license requests with the California Board of Equalization directly.
To move forward with protecting your own non-profit company, use our online forms and information to start taking advantage of the benefits that filing for non-profit status can provide. Get started now!