Aug 04 2010

What is a 501(c) 3 corporation?

Category: Business & Economy

Answer:

A 501(c) 3 is the most common non-profit, tax exempt corporation. These types of corporations will typically fall under these categories: charitable, religious, educational, scientific, literary, public safety, preventing cruelty to children or animals. Donations to these organizations above $250.00 are tax-deductible for the donors.

Limitations were put in place for 501(c) 3 corporations as well. They are unable to participate in elections or donate to the campaigns of elected officials. 501(c) 3 organizations are also prohibited from paying the officers running the organization beyond a reasonable monetary salary. In other words, they can’t make a profit, pay dividends, or distribute earnings.

501(c) 3 corporations are usually regulated by their state of incorporation and the IRS.


Tags: , , , , ,


 

 

Challenge this Answer and/or Discuss