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Steps to Establish a Nonprofit Corporation in Washington

RCW 24.03, et seq., governs Nonprofit Corporations. See also https://www.sos.wa.gov/_assets/charities/Washington%20Nonprofit%20Handbook.pdf. A Nonprofit Corporation represents a legal entity that typically further an ideal or goal rather than in the interests of profit. Many nonprofits serve the public interest, but some engage in private sector activities. To raise funds from the public, the Nonprofit Corporation may need to register with the Charities Program of the Washington Secretary of State. Charitable activities may require additional registration. Contact the Office of the Secretary of State for more information.

The Internal Revenue Service and the State of Washington created a tax exemption for 501(c)(3) organizations that further religious, charitable, scientific, literary, or educational purpose. The Nonprofit Corporation must first form the corporation in Washington.

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Advantages:
• Qualifying 501(c)(3) organizations enjoy a Federal tax exemption.
• Nonprofit Corporations remain eligible for private and public grants.
• Nonprofit Corporations offer a formalized structure.
• Members of a Nonprofit Corporation possess limited liability for their acts on behalf of the corporation.

Disadvantages:
• Creating a nonprofit corporation takes time, effort, and money. To properly incorporate, it may require hiring an attorney, accountant, or another professional.
• Nonprofit corporations must keep detailed accurate records and file paperwork with the IRS every year to maintain its status.
• The structure of the nonprofit corporation limits flexibility and must adhere to the articles of incorporation and bylaws.
• The public may scrutinize the nonprofit corporation for the acts of any of its members.

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