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Can a Virginia benefit corporation be tax exempt?

Posted by Bernard Dietz | Jan 14, 2014 | 0 Comments

The short answer: No.  A benefit corporation, like a normal stock corporation, cannot have tax exempt status because it has owners (aka shareholders) and because it uses the majority of its profits to benefit those owners.  For those reasons, a benefit corporation will not be approved as a 501(c)(3) entity that can offer charitable tax deductibility to its donors.

If you want your entity or organization be tax exempt, you need to form a non-stock corporation.  And one tip: be sure you do not use the State Corporation Commission online eFile formation service for your non-stock corporation because it will not contain the provisions the IRS requires and you'll have to do it over.

About the Author

Bernard Dietz

Bernie Dietz is a Virginia lawyer and Virginia business attorney with more than 15 years of experience as both an attorney and a business executive, which gives him a unique view into the special needs of small to medium sized businesses. He has worked in business development, sales, and marketin...

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