A Utah Nonprofit Corporation is sometimes called a Utah Not-For-Profit Corporation.

A Utah Nonprofit Corporation is an organization that is legally registered with the Utah Department of Commerce.  While the federal government must approve the tax-exempt status of a Utah Nonprofit Corporation, a Utah Nonprofit Corporation is not initially registered with any US government agency.

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

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

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

Once you have made the decision to Form a Utah 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 Utah Nonprofit Corporation.

A Utah Nonprofit Corporation is formed to provide some kind of public or community benefit.  Unlike the other types of Utah Corporations and LLCs, a Utah 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 Utah Nonprofit Corporations may not be eligible for tax exempt status.  A Utah Nonprofit Corporation may also be eligible for public and private grants.  A Utah Nonprofit Corporation is formed in a similar way as that of forming a Utah For-profit Corporation.  Utah Nonprofits must file Articles of Incorporation in the same way that Utah For-profit Corporations do.

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

While most federal tax exempt organizations are Nonprofit Corporations, registering a Utah Nonprofit Corporation does not automatically qualify the Utah 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 a Utah Nonprofit Corporation must file forms with the Internal Revenue Service.  The forms can get very complex depending on the nature of the Nonprofit.

Also, a Utah 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 a Utah For-profit Corporation is to increase shareholder value.  For most Utah 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 Utah Corporation.  Utah For-profit Corporations often face pressure to abandon social goals in order to increase their bottom line.

Utah 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 Utah 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.  A Utah Corporation of this kind is called a Utah Benefit Corporation or a Utah B Corporation.

Benefit Corporations are a hybrid between a For-profit and nonprofit Corporation.  Operating capital is easier to raise for a Utah Benefit Corporation and the Utah 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 Utah Corporation is taxed.

To qualify as a Utah 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.  A Utah 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 a Utah 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

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

In addition, a Utah Nonprofit Corporation cannot be sold to another individual, corporation or organization.

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

A Utah For-Profit Corporation may distribute any excess assets to its owners or shareholders.  There is no distribution of assets in a Utah Nonprofit Corporation.

In a Utah Nonprofit Corporation all of the money earned by or donated to the Utah 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 Utah Nonprofit Corporation's fiscal year must be kept in the Utah Nonprofit's accounts.

The state of Utah does not have a Corporate income tax so there is no need for a Nonprofit Exemption from Utah 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 a Utah 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 Utah 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 a Utah 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 Utah Department of Commerce
• 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 Utah Department of Commerce 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.