Nonprofit Corporation

Charitable organizations, educational institutions, community groups, religious organizations

15 Pa.C.S. § 5101 et seq.

Notice: Business entity selection and formation involve legal, tax, and liability considerations that vary by situation. This information is provided for educational purposes. Consult with a licensed attorney and tax professional for guidance specific to your business.

Key Facts

Formation Fee

$125

Liability

Limited liability for directors and offi...

Taxation

Tax-exempt if 501(c)(3) approved; must a...

Owners

No owners; governed by board of directors for public benefit

Liability Protection

Limited liability for directors and officers

Tax Treatment

Tax-exempt if 501(c)(3) approved; must apply separately to IRS

Management Structure

Board of Directors (minimum 1 director in PA)

Ownership

No owners; governed by board of directors for public benefit

Advantages & Disadvantages

Advantages

Tax-exempt status (if approved)

Tax-deductible donations for donors

Limited liability

Eligible for grants and government funding

Disadvantages

Cannot distribute profits to directors or officers

Must serve a charitable/public purpose

Extensive IRS application process (Form 1023)

Ongoing compliance requirements (Form 990)

Formation Steps

Draft Articles of Incorporation with required 501(c)(3) language

File with PA Dept of State (DSCB:15-5306, $125)

Publish notice of incorporation in two newspapers

Adopt bylaws and hold organizational meeting

Apply for EIN

File IRS Form 1023 or 1023-EZ ($275–$600)

501(c)(3) Requirements

Form 1023 (Full Application)

$600

For organizations expecting over $50,000 in annual gross receipts. Detailed application requiring organizational documents, financial projections, and narrative descriptions.

Form 1023-EZ (Streamlined)

$275

For small organizations expecting under $50,000 in annual gross receipts and assets under $250,000. Online-only application.

Required Articles Language

Articles must include a purpose clause, dissolution clause directing assets to another 501(c)(3), and a prohibition on private inurement.

PA Charitable Registration

$35

Must register with the PA Bureau of Charitable Organizations before soliciting donations. Annual financial reports required.

Ongoing Compliance

Nonprofits must file IRS Form 990 annually (990-N for under $50K, 990-EZ for under $200K, full 990 for larger organizations). Three consecutive years of failing to file results in automatic revocation of tax-exempt status.

Governing law: 15 Pa.C.S. § 5101 et seq. | Tax exemption: 26 U.S.C. § 501(c)(3)

Corporation Benefit Corporation