Non-Profit Corporations

In addition to for-profit corporations, Missouri law allows for the formation of non-profit corporations, also called not-for-profit corporations.

When it is formed, a Missouri non-profit corporation must be designated and designed either as a “public benefit” corporation or a “mutual benefit” corporation. In general:

  • Public benefit corporations are intended to provide some benefit to the general public, or at least some portion of the general public.
  • Mutual benefit corporations are designed to provide benefits solely to their members.
  • Public benefit corporations are subject to more stringent requirements under the statutes in order to protect the public interest in such corporations.

As is the case with for-profit corporations, a non-profit corporation is formed by filing Articles of Incorporation with the Missouri Secretary of State. The articles must be signed by at least one person acting as incorporator, although multiple persons can act as incorporators if desired. After the Secretary of State issues a Certificate of Incorporation, the incorporators (or the initial directors of the corporation, if named in the articles) must conduct an organizational meeting, the business of which includes appointing officers and adopting bylaws.

Some non-profit corporations have members (somewhat analogous to shareholders in for-profit corporations) who elect the members of the Board of Directors. However, it is not required that a Missouri non-profit corporation have members. If a non-profit corporation does not have members, the appointment of successor directors to the Board of Directors is usually done by existing members of the board (this arrangement is referred to as “self-perpetuating” Board of Directors).

A non-profit corporation must have a Board of Directors consisting of at least three members, but it can have as large a board as the organizers desire. The board has overall authority over the operations of the corporation and selects the corporate officers.

Unless otherwise provided in the corporation’s Articles of Incorporation or Bylaws, the officers of a non-profit corporation in Missouri must consist, at a minimum, of a chairman or president or both, a secretary, and a treasurer. Other officers may be appointed by the board if desired. The same person may hold more than one office.

Most non-profit corporations will want to make application to the Internal Revenue Service for exemption from federal income taxes under Internal Revenue Code Sec. 501(c)(3), or other applicable code provisions. If the corporation qualifies, contributions to the corporation will be deductible by the donors as charitable contributions. Even if a federal tax exemption is obtained, however, non-profit corporations are generally required to file annual information returns with the Internal Revenue Service.

It should be noted that even a qualified tax-exempt non-profit corporation may be subject to income tax on income derived from the operation of a business enterprise which is not related to the purpose for which it received its exemption.

Scott Law Firm forms and maintains non-profit corporations. Because most non-profit corporations are somewhat unique in their purposes and structure, our fees for this type of work are usually based on hourly charges.

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