Nonprofit Corporation

A nonprofit corporation is specifically organized for purposes other than profit-seeking. Nonprofits can include, but are not limited to, religious organizations, academic institutions, professional associations and cultural clubs.

The most important difference between for-profit and nonprofit corporations is that nonprofits cannot be organized for individual personal gain, and are required to give their assets (funds, office equipment, etc.) to a similar nonprofit upon disbanding. In addition, profits earned by nonprofits cannot be disbursed to individuals (the board of directors, staff members, volunteers, etc.), but must be used to advance the organization and its mission.

Nonprofits enjoy the same benefits as for-profit organizations, including the ability to purchase property. A common misconception is that nonprofit status automatically confers property tax exemptions; this is not always the case. For a detailed explanation on property tax exemptions for nonprofits, see Chapter 16: Property Taxes.

Like for-profit corporations, nonprofits must also file the correct paperwork on an annual basis or face dissolution. Both condominiums and cooperatives are considered nonprofit corporations. See the previous sections for more details on these models of ownership, as well as the Corporation sections.

For more information about forming a nonprofit in Illinois, review A Guide for Organizing Not-for-Profit Corporations, developed by the Illinois Secretary of State Office. Illinois nonprofits are governed by the Illinois Secretary of State office under the General Not-for-Profit Act of 1986.