In the State of New York, nonprofit corporations are addressed under Section 402 of New York’s Not-For-Profit Corporation Law. There are four types of nonprofit corporations in the State of New York. Those types of nonprofits that are formed for charitable, educational, religious, scientific, or literary purposes are known in New York as Type B nonprofits.
Forming a tax-exempt nonprofit corporation under section 501 (c) (3) of the Internal Revenue Code offers specific advantages to the nonprofit including tax exemptions, eligibility to receive private and public funds, certain potential limitations on liability for officers, directors, trustees, employees and members of the nonprofit as well as other legal and structural benefits. Certain formalities must be followed, however, to achieve these benefits.