Non Stock Corporations

Non-stock corporations are also known as "non-profits." Such corporations are a breed apart in the business world. This category of companies includes many different kinds of organizations, including institutions of higher learning (like colleges and universities), community resources (like botanical gardens) and charitable organizations (The March of Dimes, for example). Many religious institutions are also classified as non-stock or non-profit companies.

Non-profit corporations, though their name might suggest otherwise, do bring in money. The difference between for-profits and non-profits is that income garnered by non-profits cannot be used for the personal gain of those involved with the operation of such companies. The money that is raised by non-stock corporations must go primarily towards the sustenance and improvement of the organization itself.

As non-stock companies do not have stockholders, a different group of people must be designated as the technical "owners" of these corporations. "Members" take the place of stock holders in the non-profit arena. Members can be defined in a number of different ways, depending on the needs and structure of the organization. Voting members, a subset of the general membership, have many important responsibilities when it comes to the operation of a non-profit, including electing the company's Board of Directors.

Creating Non-Stock Corporations

While non-profit corporations do not have the specific financial focus of for-profit corporations, these organizations are still conscious of the bottom line. The opportunity to save money on taxes and fees can certainly benefit non-profits. Such companies, like their for-profit siblings, often seek to incorporate in Delaware due to the state's unique business climate.