Types of Business Entities

Types of Business EntitiesSome casual businesses start as a dba (doing business as). These are generally small businesses trying to stay under the tax radar (yard work, house cleaning, etc.) However, when the business truly wants to be a business they need to get an EIN number (tax identification number). All businesses, for-profits and n on-profits must have an EIN number so the Department of Revenue knows where to send tax bill.
There are many kinds of for-profits ( sole ownership, partnership, S-corps, LLCs, etc.) and many kinds of non-profit businesses (associations, chambers, political parties, cemetaries, schools, fraternal organizations, 501c3, etc.). Of these different non-profit business entities, essentially, onlt the 501c3 is eligible for foundation grants. (For-profits are typically eligible for government grants).

A 501c3 is a corporation. It is a non-profit corporation and must file Articles of (non-profit) Incorporation with the State. The 501c3 corporation must have a Board of Directors (for-profits do not have to have a Board of Directors). The top employee of a non-profit is generally called the Executive Director, where as in a for-profit business it is the President or CEO. In a non-profit, Board members can not be employees, nor can they be financially compensated.

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