Glenview Nonprofit Incorporation Attorney
Few organizations in Glenview, Chicago, or the surrounding suburbs have done as much good as our neighborhood nonprofits. These organizations feed the poor, give gifts to children, encourage the sick, educate the public, save the animals, and more. But although doing good is not restricted to a formal company, you do have to become a formal company in order to solicit donations and achieve tax-exempt status in Illinois. This is where Glenview nonprofit attorney James Provenza can help.
While you can choose to incorporate your business yourself, there are many legal and financial ramifications to the type of corporation you choose to create. There are also many official documents that will need to be drafted and filed that will become the legal foundation upon which your organization will be built.
Hiring James C. Provenza & Associates, PC to help you navigate through this process can not only help you as you build your company, but can save you a significant amount of heartache later on. We help you at all stages of the incorporation process, from developing your nonprofit organizational structure to drafting and filing your Articles of Incorporation and Bylaws.
LLC v. S-Corporation v. C-Corporation
One of the first decisions you need to make is what type of business to create. Not all corporations are created equal and the one you choose can have significant ramifications on your business down the road. We help you sort through your options, choose the best structure for your situation, and identify and avoid problems before they arise.
The three types of business structures you have to choose from include the LLC, S-Corporation, and C-Corporation, which are explained below.
A Limited Liability Company (LLC) is not truly a corporation, but because it combines some of the features of a corporation with those of a partnership, it is a popular alternative to S- and C-Corporations among Chicago nonprofits, especially new startups. This type of business shields the owner(s) from being personally liable if the company has financial trouble, which means that if you lose a lawsuit or go bankrupt, only the business’ assets can be seized – not your personal ones.
It also allows for maximum flexibility in organizational leadership. Unlike true corporations, which necessitate an official director and officers, annual meetings, formal minutes, etc., an LLC is not bound to the same formalities. It can have an unlimited number of members, and these members can be real people or certain types of business organizations.
LLCs also avoid double-taxation (a situation known as “pass-through taxation”) since its members pay taxes on their income, but the LLC does not. Although this may seem like an unnecessary distinction for an NPO, which by definition is tax-exempt, your exemption only excludes you from having to pay taxes – you do have to file them or you can automatically lose your tax-exempt status.
An S-Corporation, like the LLC, is not subject to corporate taxes, but allows its members to enjoy freedom from personal liability. Like the C-Corporation, it has a formal board of directors, officers, and operates according to corporate protocol, but unlike the C-Corp, all income becomes taxable to its members at tax time, whether or not it has been distributed to its members or held within the organization.
The S-Corporation does offer its members some significant tax benefits, however, including the ability to claim businesses losses on your personal income taxes and the advantage of lower self-employment taxes.
Unlike the LLC, and S-Corporation can only have 100 owners and these owners cannot be other corporations, unqualified trusts, or non-resident aliens.
A C-Corporation is the traditional form of the corporation and is treated like a distinct person for tax and legal purposes. There are no limits on how many owners it can have; however one of the advantages of a C-Corporation in the for-profit world is the ability of the owners to hold different types of stock and receive dividends when the business makes a profit. Since NPOs make no profit, talk to a nonprofit attorney first before choosing this business structure for your organization.
Illinois Nonprofit Incorporation Process
Once you’ve spoken to us about your business and we’ve helped you choose the business structure that’s right for you, you’ll also need to make several more decisions and draft several legal documents to file with the state. We can walk you through this entire process and help ensure that the foundation you lay is a secure one with no surprises that can cause unnecessary strife in the future that could hinder your ability to serve your community.
Some of the ways in which we can help you include:
- Working with you to draft or review your Articles of Incorporation
- Helping you write or review your Organizational Bylaws
- Registering your NPO with the State of Illinois
- Filling out and filing your requests for nonprofit status with the Illinois and Federal governments.
Glenview’s Nonprofit Attorney
If you’re ready to incorporate your nonprofit, congratulations! We want to support your efforts and partner with you to help you succeed. We can meet with you in our primary location in Glenview or meet you in Deerfield, Oakbrook, or Chicago. We also serve Cook County and Lake County. Just give us a call to discuss your situation or set up an appointment at (847) 729-3939.