Non Profit Filings

Kevin Rubel's Advisory
According to Kevin Rubel, a non-profit organization is a Corporation whose primary motive is to benefit the public and not generate any profits. More importantly, a non-profit organization may not allocate income to any of its directors or managers. Further, a Nonprofit Corporation is not just another business and should not be used as a substitute structure for a business whose chief aim is to make money.
Is Tax Exempt the same as "Nonprofit"?

Definitely not says Kevin Rubel. Even though one may be enlisted as Nonprofit Corporation, it does not automatically mean one is not tax exempt from the Federal Income Tax. In some cases, even local state taxes have to be paid.

Kevin Rubel defines a "tax-exempt" Corporation as an entirely separate structure that has earned an exemption from income tax liability. A Nonprofit Corporation, on the other hand, is almost never automatically eligible for exemption from income tax liability until an application has been made and approved by the IRS.
Are there rules as to how many Directors a Non Profit Organizations should have? Yes, says Kevin Rubel. The rules vary from state to state. Most States require Nonprofit Corporations to have a minimum of three directors. However, some states do allow for less than three directors. A handful of states also allow for only director. So, Kevin Rubel points out that Non Profit Corporations should check out the rules pertaining to their State before determining the number of Directors to be appointed.

Is a Non Profit Corporation allowed to pay any money to its Directors? Yes, says Kevin Rubel, a Nonprofit Corporation may pay some compensation to its officers, directors, and/or employees. However, it is vital that the compensation be paid only for services rendered to the Nonprofit Corporation.

For those who ask Kevin Rubel "Are there rules where one can form a non-profit corporation?" he advices: "In general, there are no rules where one can establish a non-profit corporation. However, one has to be practical. There is no point in establishing a non-profit firm in Alaska and live in New York City. Remember, non-profit does not mean that you do not have to pay state fees and taxes- so it is important to work out of the same state. Further, if your directors and officers all live in one state, it is better to establish the corporation in the same state."

Kevin Rubel further says: "What most people forget is that establishing any business in another state means firstly, you have to qualify to be allowed to do business in another state and secondly you are subjected to taxes in the state where you are incorporated and the state where you conducting your business. Similarly, the chances of a lawsuit are also doubled".

Getting down to details, Kevin Rubel advices Non Profit Corporations to choose a name that reflects the intent of the Coporation. In general, there are no rules about the kind of names that can be selected by Non Profit Corporations. "However, the name you choose should reflect your motivation" says Kevin Rubel. There is no point in choosing a name that reflects money and profits. Kevin Rubel agrees further that it is important to search for a name that is not deceptively similar to another established entity. Moreover it is advisable to include the words Inc., at the end of the business name selected.

Next in consideration is the question, "How does one establish a non-profit corporation?" While some companies can help you file an application online, it is only the first step in the right direction. Most financial offices or people like Kevin Rubel can help you with this task. Individuals like Kevin Rubel know the requirements, forms, and required language. It is best to leave the filing to a professional.

It follows that if you are looking to set up a Non Profit Corporation, it would be in your own interests to approach people like Kevin Rubel and take advantage of their vast knowledge and experience in the field.