Many people use the words “nonprofit,” “not for profit,” and “tax exempt” interchangeably. In Missouri, the legal usage is more exact.
A Missouri benevolent corporation is a corporation formed under Chapter 352 of Missouri’s Revised Statutes. Benevolent Corporations are also referred to as “Pro Forma” corporations.
Missouri has another kind of nonprofit corporation, addressed in Chapter 355. Chapter 355 is called the “Nonprofit Corporation Law.” So we have two kinds of “nonprofit” corporations: Benevolent Corporations and Nonprofit Corporations.
Benevolent Corporations have their own set of rules! If you are amending the governing documents for a Benevolent corporation, you should talk to a lawyer who understands the difference!
Changing the charter of a Benevolent Corporation takes multiple steps, including court filings; the process is not effective until you complete all of them. This trips up many small charities; our research in 2012 showed that less than 3% of Benevolent Corporations have successfully amended their articles.
Nonprofit (Chapter 355) groups do not have to obtain court approval to change their charter, but must have a registered agent and file annual reports with Missouri’s Secretary of State.
Both Chapter 352 and Chapter 355 corporations can be recognized as tax exempt by the IRS. Some LLCs may also qualify for tax exemption, too.
Newer is not always better. Churches, in particular, have governing documents that do not fit the “board of directors” model of Chapter 355. And some groups have argued that Boards of Chapter 355 corporations are largely unaccountable to donors and affiliates, even if those relationships are written into their governing documents. It takes a careful analysis to determine the best fit for a particular group.