An Idaho Nonprofit Corporation is sometimes called an Idaho Not-For-Profit Corporation.

An Idaho Nonprofit Corporation is an organization that is legally registered with the Idaho Secretary of State.  While the federal government must approve the tax-exempt status of an Idaho Nonprofit Corporation, an Idaho Nonprofit Corporation is not initially registered with any US government agency.

An Idaho Nonprofit Corporation is an organization that works to serve some kind of public interest rather than to provide financial benefit to any particular individuals or entities.

Many Idaho Nonprofit Corporations have much in common with Idaho For-profit Corporations.  This includes the liability protection that comes with a legally registered Idaho Nonprofit Corporation.  A lot of Idaho Nonprofit Corporations hire managers and employees just like an Idaho For-profit Corporation does.  The application process for an Idaho Nonprofit Corporation is very similar to that of an Idaho For-Profit Corporation.

Contrary to popular belief, Idaho Nonprofit Corporations can and do make money.  In an Idaho Nonprofit Corporation, any profits must legally go directly back into the Idaho Nonprofit Corporation.

The short answer is no. The state of Idaho does not legally require a lawyer to form an Idaho Nonprofit Corporation.  However, if there is anything about forming an Idaho Nonprofit Corporation that you're not sure about you should seek the advice of a competent Idaho lawyer, an Idaho accountant, or both BEFORE you Incorporate.

Once you have made the decision to Form an Idaho Nonprofit Corporation, a lawyer can file your documents and act as a middle man for a few hundred dollars an hour; or you can use an online service provider like All Business Documents to perform these services and save money that you can use in your new Idaho Nonprofit Corporation.

An Idaho Nonprofit Corporation is formed to provide some kind of public or community benefit.  Unlike the other types of Idaho Corporations and LLCs, an Idaho Nonprofit Corporation may be eligible for certain benefits, including tax exemptions on both the state and federal levels.  Depending on the nature of the organization, some Idaho Nonprofit Corporations may not be eligible for tax exempt status.  An Idaho Nonprofit Corporation may also be eligible for public and private grants.  An Idaho Nonprofit Corporation is formed in a similar way as that of forming an Idaho For-profit Corporation.  Idaho Nonprofits must file Articles of Incorporation in the same way that Idaho For-profit Corporations do.

An Idaho Nonprofit Corporation comes with the same liability protection as the other types of Idaho Corporations.  The main difference between an Idaho Nonprofit Corporation and an Idaho For-profit Corporation is how the profits of the Idaho Corporation are distributed,  In an Idaho For-profit Corporation profits can be distributed to shareholders.  Idaho Nonprofits are legally required to use the income to further a goal that benefits the community or some part of the public.

The most common types of Idaho Nonprofit Corporations are:

• Idaho Public-benefit Nonprofit Corporations
  Organized for the general public benefit, rather than for the interest of its members or shareholders
  Formed primarily for social, educational, recreational or charitable purposes
  Examples are food banks and youth sports organizations
• Idaho Religious Corporation
  Organized to promote religious purposes
  Subject to less complicated filing and reporting requirements than other types of Corporations
  May be exempt from regulations governing non-religious groups performing the same services
• Idaho Mutual-benefit Nonprofit Corporation
  Serves its members in ways other than just distributing profits to them
  Cannot obtain IRS tax-exempt status as a charitable organization
  Pays the same taxes as For-profit Corporations
  Examples are homeowners associations or a public utility companies

While most federal tax exempt organizations are Nonprofit Corporations, registering an Idaho Nonprofit Corporation does not automatically qualify the Idaho Nonprofit for tax exempt status at the federal level.  The IRS recognizes various types of tax exempt Nonprofit Corporations.  To receive federal tax exempt status an Idaho Nonprofit Corporation must file forms with the Internal Revenue Service.  The forms can get very complex depending on the nature of the Nonprofit.

Also, an Idaho Nonprofit Corporation cannot legally use its resources for propaganda or to further a political cause or to support a candidate for public office.

One of the major responsibilities of an Idaho For-profit Corporation is to increase shareholder value.  For most Idaho Corporations the pursuit of shareholder value is done without regard for specific benefits to the public.  The only benefits that matter are those that benefit the shareholders, who are the owners of the Idaho Corporation.  Idaho For-profit Corporations often face pressure to abandon social goals in order to increase their bottom line.

Idaho Nonprofit Corporations are formed to provide some kind of public benefit but may be restricted in their ability to raise capital when they need to grow.

The state of Idaho has created a new kind of For-profit Corporation which has a legal responsibility to include some kind of public benefit in their Corporate operating requirements.  An Idaho Corporation of this kind is called an Idaho Benefit Corporation or an Idaho B Corporation.

Benefit Corporations are a hybrid between a For-profit and nonprofit Corporation.  Operating capital is easier to raise for an Idaho Benefit Corporation and the Idaho Benefit Corporation is required to provide some kind of public benefit.

Benefit Corporations do not have any special tax breaks or benefits.  Benefit Corporations are taxed just like any other Idaho Corporation is taxed.

To qualify as an Idaho Benefit Corporation, a Corporation must have an explicit social or environmental mission, and a legally binding fiduciary responsibility to take into account the interests of workers, the community and the environment as well as its shareholders.  An Idaho Benefit Corporation must also publish independently verified reports on its social and environmental impact alongside its financial results. 

Some examples of the specific public benefit that an Idaho Benefit Corporation must provide, among others, include:

• Providing low-income or under served individuals or communities with beneficial products or services
• Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business
• Preserving the environment
• Improving human health
• Promoting the arts, sciences or advancement of knowledge

If needed, we can help you form a Benefit Corporation in Idaho.

No one person or group of people can own an Idaho Nonprofit Corporation.  Once it is incorporated, the Idaho Nonprofit Corporation is a separate legal entity from its founders, directors, officers, and employees.  The Idaho Nonprofit Corporation itself owns assets of the business and is entitled to receive all revenues from its operation.  Any equity in an Idaho Nonprofit Corporation belongs to the organization itself, not to the founders, board of directors or staff.

In addition, an Idaho Nonprofit Corporation cannot be sold to another individual, corporation or organization.

Contrary to popular belief an Idaho Nonprofit Corporation may actually make a profit.  Many Idaho Nonprofit Corporations derive much of their funding from tax-exempt donations.  Sometimes an Idaho Nonprofit Corporation can receive more in donations that the costs to actually run the organization.

An Idaho For-Profit Corporation may distribute any excess assets to its owners or shareholders.  There is no distribution of assets in an Idaho Nonprofit Corporation.

In an Idaho Nonprofit Corporation all of the money earned by or donated to the Idaho Nonprofit organization is used in pursuing the organization's objectives as stated in its Articles of Incorporation.  Any excess capital after the close of the Idaho Nonprofit Corporation's fiscal year must be kept in the Idaho Nonprofit's accounts.

The state of Idaho does not have a Corporate income tax so there is no need for a Nonprofit Exemption from Idaho Corporation income taxes.

501(c) refers to a section of IRS code which deals with tax exempt organizations including, but not limited to, Nonprofit Corporations.

The most common type of tax-exempt organization falls under section 501(c)(3) of the IRS code.  This section of the IRS code allows an Idaho Nonprofit organization to be exempt from federal income tax if its activities include any of the following purposes:

• Charitable
• Religious
• Educational
• Scientific
• Literary
• Testing for public safety
• Fostering amateur sports competition
• Preventing cruelty to children or animals

There are other types of 501(c) tax exempt organizations defined in the IRS code - 29 of them - but 501(c)(3) tax exempt organizations are by far the most common in the state of Idaho and the US.

One advantage to qualifying to be a 501(c)(3) tax exempt organization is that most foundations will only make grants to 501(c)(3) Nonprofits. 

Tax exemption does not excuse an Idaho Nonprofit organization from maintaining proper records and filing any required annual or special-purpose tax returns if they are required.  Failure to file required returns such as Form 990 (Return of Organization Exempt From Income Tax) may result in fines.

One prohibition for 501(c)(3) organizations is that they are prohibited from conducting political campaign activities to intervene in elections to public office.  There are, however, provisions which may allow some 501(c)(3) organizations to legally lobby to influence legislation.

BEFORE you apply with the IRS for 501(c)(3) Tax Exempt status it will need the following:

• Articles of Incorporation approved by the Idaho Secretary of State
• Bylaws
• Federal Employer Identification Number (EIN)
• Statement of purpose that meets IRS requirements
• Statement that your Nonprofit Corporation will not engage in prohibited political or legislative activities
• A Plan of Dissolution describing the distribution of assets upon dissolution

There is also very specific language which needs to be included in your Articles of Incorporation which are filed with the Idaho Secretary of State if you want to get 501(c)(3) Tax Exempt Status.

When a Nonprofit Corporation dissolves all remaining assets must be distributed to other active Nonprofits.  None of the remaining assets can be distributed to any directors, members or staff.

If you want to apply for 501(c)(3) Tax Exempt Status we will make sure your Articles of Incorporation include everything that the IRS needs before we submit them to the state.

When an Idaho Nonprofit Corporation wants to cease operations, any assets of the Idaho Nonprofit Corporation must be distributed to other Nonprofits which were formed for similar purposes as the Idaho Nonprofit Corporation which is closing.

Under no circumstances can an Idaho Nonprofit Corporation distribute any remaining assets to its founders, directors or employees.

If you are ready to Form an Idaho Nonprofit Corporation simply choose which Idaho Nonprofit options that you want in the upper right corner of this screen then click the Next Step button.  You will be directed to a screen on which you can enter your specific an Idaho Nonprofit information and finalize your order.

If you have any questions regarding our Idaho Nonprofit services you can call us at 855-771-2477.