Legal Question in Business Law in Florida

new corporation & the IRS

I'm registering a new corporation and have some related questions: - Will I need to apply for an FEI whether or not the corporation is nonprofit? What IS ''nonprofit '' mean for a corporation? If the corporation is FOR-profit am I required to pay federal taxes even if I made no money? (considering if my business does not do as well as expected). Do nonprofit corporations pay taxes on the money used to pay for office supplies and to pay the employees? What if my expenses exceed my profits or donations?


Asked on 4/30/06, 9:31 pm

1 Answer from Attorneys
Thomas Shigo The Shigo Law Firm, P.A.

Re: new corporation & the IRS

Being a "non-profit" corporation under Florida law means that no part of the income or profits is distributable to the corporation's members, directors of officers. This is a Florida designation and only applies to taxes that Florida imposes. It has no relation to Federal Income tax law. To be exempt from federal income taxes the corporation must file an application and meet the requirements under Internal Revenue Code section 501(c) or (d). Until you do this you still must file and pay federal income tax even though you are designated as a "non-profit" corporation.

All corporations must have an EIN. The only possible exception is a single member LLC with no employees.

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Answered on 5/01/06, 11:00 am


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