Nonprofit Corporation

A nonprofit corporation is an entity created by one or more persons and granted a charter as legal recognition of a separate entity. The separate entity has its own rights, privileges, and liabilities distinct from those of its members, officers, or board of directors. A corporation exists only by virtue of law, and has only those powers conferred on it by statutes, its articles of incorporation, bylaws of the corporation, and the resolutions and decisions of its members, officers, and board of directors. A nonprofit corporation enjoys inherent qualities:

  • Limited liability;
  • Possible tax advantages;
  • "Immortality", unless dissolved or established for a specific period;
  • Structure and accountability;
  • Ancillary benefits including cheaper postage rates, access to media through public service announcements, and a "halo effect" in which the public is more willing to support a nonprofit corporation's mission because of a real or perceived view that the organization is founded and operated in the public's interest; and
  • Access to public or private grant money.

A corporation may hold property perpetually without the intricacies of conveyances regardless of the succession of members, officers, or directors.

Unlike any other corporation, a nonprofit corporation is not "owned" by any one person or group of persons and cannot be "sold." In the event the directors of a nonprofit corporation want to dissolve the corporation, they must distribute all of its assets to another nonprofit corporation.

A nonprofit corporation is formed to carry out a charitable, educational, religious, literary or scientific purpose of its members.

Domestic Corporation

A domestic nonprofit corporation is one that has filed articles of incorporation with North Dakota's Secretary of State according to North Dakota's Nonprofit Corporation Act (NDCC, Chapter 10-33).  Corporate existence commences when the articles of incorporation are filed, or at a later date specified in the articles of incorporation, but not later than ninety days from the date of filing.

Trade Name

A nonprofit corporation using a trade name (dba) in pursuit of its mission must file a Trade Name Registration with the Secretary of State. A trade name is a name other than the corporate name. (See Trade Name/Franchise Name)

The Trade Name Registration:

  • Affords exclusive right to that name in the State of North Dakota. No other organization or business may file a name with the Secretary of State that is the same as, or deceptively similar, to any registered name.
  • Establishes a public record from which the name of the corporation using the name can be identified.

Foreign Corporation

A foreign nonprofit corporation is one that has filed articles of incorporation under laws other than the laws of North Dakota. "Foreign" refers to corporations incorporated in jurisdictions out-of-state as well as out-of-country.

A foreign corporation must obtain a certificate of authority from the Secretary of State:

  • To conduct activities in North Dakota, or
  • To obtain any license or permit issued according to North Dakota laws.

A foreign corporation using a name other than its corporate name must comply with the Trade Name Registration requirement as described above. (See Trade Name/Franchise Name)