What are the benefits of forming a nonprofit corporation?

There are two main benefits to forming a nonprofit corporation: (1) protection from liability; and (2) eligibility for tax exempt status. Structuring an organization as a nonprofit allows the organization to exist as a legal entity separately from its founder(s). Having a separate legal entity also protects directors, officers, and members from personal liability for the corporation’s debts and liabilities. A nonprofit also is eligible to apply for tax exempt status if it qualifies as a public charity.