What is a characteristic of a Nonprofit Corporation?

A nonprofit corporation is characterized by its lack of ownership by individuals or shareholders. This structure is designed to focus on fulfilling a mission or purpose that benefits the public or a specific community rather than generating profits for private individuals. Nonprofit organizations typically reinvest any surplus revenue back into their services or programs, rather than distributing profits to owners or shareholders.

This characteristic differentiates nonprofit corporations from for-profit entities, where ownership usually exists and profits are meant to benefit owners or shareholders. Nonprofits may have members, but those members do not have ownership in the traditional sense as found in for-profit corporations. Instead, they participate in governance and support the organization’s mission without the entitlement to profits.

The other choices presented reflect characteristics that do not apply to nonprofit corporations. Nonprofits do not pay federal taxes on income related to their exempt purposes, and they do not exist to generate profits for shareholders, which underscores the distinction of being owned by no one.