One of the major advantages of structuring your business as a nonprofit corporation is that it will enable you to qualify for tax exempt status for the corporation. After incorporation, you still need to apply with the IRS for a qualification letter showing it is tax exempt. This can take some time.

Even before the tax exempt status is approved, the corporation will not pay tax if it is not showing a profit. After it is qualified by the IRS, even if it does earn a profit, provided the operations are within the charitable purposes for which the corporation was established, the corporation will not be taxed.

Tax exempt status can provide an extraordinary level of additional freedom to a business enterprise, without the burden of paying taxes. It is one of the primary benefits to consider as you decide upon the type of business entity you create. Then you can focus on planning and executing on the core strategies toward fulfilling your mission.