For example, it is possible that the IRS might later challenge your corporation's tax-exempt status by arguing that your organization is not a church. If their argument is successful, your corporation would be subject to back tax and tax fines for the period it operated as a corporation. The 1023 application is filed in a timely manner if it is postmarked within 15 months after the end of the month when your articles were filed. If you file on time, the tax-exemption is effective retroactively to the date on which your articles of incorporation were filed. Most states require nonprofit corporation to have a minimum of three directors.
Nonprofits also receive the same limited liability protection as for profit companies.
This means that directors or trustees, officers and members are typically not personally responsible for the debts and liabilities of the corporation. A corporation possesses the feature of unlimited life. If an owner dies or wishes to sell their interest the corporation will continue to exist and do business. The main disadvantage of forming a nonprofit company is the increased paperwork that is required. Articles of incorporation must be filed with the state, bylaws prepared and meeting minutes must be kept with your corporation's records.