Difference Between a Benefit Corporation and a Nonprofit Organization

Form a Public Benefit Corporation Now

While both may have social or environmental goals, Delaware Public Benefit Corporation are not the same as Nonprofits. A Delaware Nonprofit Organization typically operates for a charitable purpose without generating profits and, therefore, qualifies for a tax-exempt status from the IRS.

ngo pbcLegal Structure

One of the key differences between a public benefit corporations and non-profit corporation that is legally required to pursue a positive impact on society or the environment while generating profit for shareholders. A nonprofit organization, on the other hand, is an entity formed for purposes other than making a profit. Nonprofits are not owned by shareholders and do not distribute profits to individuals. This means that a public benefit corporation will generate profits and distribute dividends to shareholders, while a nonprofit will reinvest any surplus revenue back into its own programs.

Tax Treatment

One of the main benefits of a nonprofit is that they're typically exempt from federal taxes and may also be exempt from state and local taxes. Public benefit corporations are taxed as traditional for-profit corporations, and shareholders are taxed on any dividends they receive. However, the public benefit aspect of their operations may provide certain tax incentives or advantages.

Learn more about PBCs:
 
 
 
 
 
 
 

Since 1981, Harvard Business Services, Inc. has helped form 424,008 Delaware corporations and LLCs for people all over the world.

Registered Agent Service

Harvard Business Services, Inc. guarantees your annual Delaware Registered Agent Fee will remain fixed at $50 per company, per year, for the life of your company.