{"componentChunkName":"component---src-templates-blog-post-ts","path":"/not-for-profit-doesnt-mean-that-the-books-dont-need-to-balance/","result":{"data":{"site":{"siteMetadata":{"title":"Clausehound Blog","author":"Joshua Koudys"}},"markdownRemark":{"id":"8cce3e1d-4696-529e-88b3-e93516d9791a","excerpt":"Not for profit corporations must make money to ‘stay in business’, but how the amount of surplus income and the purposes for which it is made is treated by tax…","html":"<p>Not for profit corporations must make money to ‘stay in business’, but how the amount of surplus income and the purposes for which it is made is treated by tax authorities, may vary from jurisdiction to jurisdiction. The distribution/use of profits must comply with <strong>applicable corporate and tax legislation</strong>. The articles of incorporation must comply with applicable legislation.</p>\n<p>The author explains that not for profit organizations often have the idea that in order to be a non-profit they don’t have to make money. Non-profit organizations, like any business, have to make money. They have to be able to meet budgets, including payroll. If you own a business corporation, and there is money left over (quarterly, semi-annually or annually) then, as the owner (shareholder), you can take some or perhaps all of that money as a bonus or distribution. In a non-profit organization, corporate ‘profit’ can only be used for corporate (not for profit) purposes, or ‘given’ to other not for profit corporations.</p>\n<p><a href=\"http://www.heraldtribune.com/article/20150629/COLUMNIST/150629711/2127?Title=What-is-a-non-profit-and-do-you-want-one-\" target=\"_blank\" rel=\"nofollow noopener\">Read the article here.</a></p>\n<h3>Takeaway:</h3>\n<ul>\n<li>If you own a business corporation, and there is money left over (quarterly, semiannually or annually) then, as the owner (shareholder), you can take some or perhaps all of that money as a bonus or distribution. In a non-profit organization, corporate ‘profit’ can only be used for corporate purposes, or ‘given’ to other not for profit corporations.</li>\n</ul>","frontmatter":{"title":"Not For Profit Doesn't Mean that the Books Don't Need to Balance!","date":"October 28, 2015","description":"Not for profit corporations must make money to 'stay in business', but how the amount of surplus income and the purposes for which it is made is treated by tax authorities, may vary from jurisdiction to jurisdiction.","author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal","bio":"Rajah Lehal is Founder and CEO of Clausehound.com.  Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.","image":{"childImageSharp":{"fluid":{"base64":"data:image/jpeg;base64,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","aspectRatio":1,"src":"/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg","srcSet":"/static/d7bbad08c257f3987a4a5710553e9e17/2b9ee/Rajah.jpg 80w,\n/static/d7bbad08c257f3987a4a5710553e9e17/e5d64/Rajah.jpg 160w,\n/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg 320w,\n/static/d7bbad08c257f3987a4a5710553e9e17/6e63d/Rajah.jpg 400w","sizes":"(max-width: 320px) 100vw, 320px"}}}},"tags":["Corporation Type","Not for Profit Articles of Incorporation","Company Formation","Rajah"]}}},"pageContext":{"slug":"/not-for-profit-doesnt-mean-that-the-books-dont-need-to-balance/","previous":{"fields":{"slug":"/employment-inducement-awards-for-chief-executive-includes-acceleration-clause-in-stock-option-plan/"},"frontmatter":{"title":"Employment Inducement Awards for Chief Executive Includes Acceleration Clause in Stock Option Plan","tags":["ESOP","Acceleration","Human Resources","Rajah"],"author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal"}}},"next":{"fields":{"slug":"/role-of-the-board-of-directors-to-protect-the-investors/"},"frontmatter":{"title":"Role of the Board of Directors: To Protect the Investors","tags":["Corporation","Board of Directors","Investor","Term Sheet","Company Formation","Shareholders Agreement","Investor Term Sheet"],"author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal"}}}}}}