I'd like to offer a correction/clarification. My intention isn't to point out that you were wrong, but to prevent someone else from getting the wrong idea.<p>You said that you decided to form this corporation as a not-for-profit [assuming this was a 501(c)(3)] because: "a project of this sort could only generate so much revenue," and "since it was my first major project, it only made sense to start somewhere small and make the organization non-profit."<p>The revenue generating capability of an organization is not something you consider when you decide to go not-for-profit. There are non-profit organizations that receive hundreds of millions of dollars a year in income. Non-profit organizations can make a little or a lot, it doesn't really matter.<p>The size of a corporation also has little or nothing to do with whether or not you should structure your company as a not-for-profit. Examples of some large non-profits are:<p>Org (2010 revenue)
Mayo Clinic ($7.9 billion)
United Way ($3.84 billion)
American Cancer Society ($926 million)
National Red Cross ($3.21 billion)<p>Not-for-profit organizations have many strict limitations on their method of operation. Everything from funding to salaries are limited in some fashion. You typically opt to form a not-for-profit corporation when you are forming a charity that you want to protect from becoming a profit motivated enterprise once you've moved on.
Did you incorporate in Rhode Island for any reason other than the absence of age restrictions?<p>We aren't exactly known as a business friendly state, unless you're an anti-government[1] retired up baseball player who has decided to take handouts from the governor [2].<p>[1] <a href="http://en.wikipedia.org/wiki/Curt_Schilling#Political_advocacy" rel="nofollow">http://en.wikipedia.org/wiki/Curt_Schilling#Political_advoca...</a><p>[2] <a href="http://en.wikipedia.org/wiki/38_Studios" rel="nofollow">http://en.wikipedia.org/wiki/38_Studios</a>
Only tangentially related to the article, but please use a more screen-friendly font than Helvetica Neue Light for bodies of smaller-point text. It was a bit painful to read.
Based on what you did, its pretty obvious that you did not consult a lawyer, because what you did is illegal under US tax law.<p>Nonprofits are required to meet specific requirements to get tax-exempt treatment <i>before</i> engaging in income-generating activity. 501(c)(3) status <i>is not granted automatically</i> (IOW, it is not granted "statutorily"). It is a legal status specifically granted by the IRS after a review.<p>Income raised prior to receiving the exemption is almost always treated as income earned through non-exempt (i.e., for-profit) activities. There are exceptions, of course, but you need to consult a tax lawyer (specializing in non-profit/charitable tax law) to figure out if you qualify for those exceptions. There are very important reasons behind this (including, but not limited to, the deductibility of transactions).<p>State tax law may be more permissive, but that only affects your state tax status. Federal tax law governs your federal tax status. It may be possible to be a non-profit for state taxation but a for-profit for federal taxation.<p>Also, to address inaccuracies in your blog post:
1) There are no age restrictions in any state on incorporation. However, few businesses will enter into contracts with minors unless their parents guarantee the contracts because minors have very special rights under American contract law.<p>2) There is no need to incorporate a solo operation. Incorporation is intended to simplify accounting for collaborative efforts. Individuals can simply register a DBA (if they're making up a "company" name"). In your case, incorporating is proper: you claim to be founding a charitable organization, so incorporation is a necessary step to receiving tax-exempt status.<p>3) It's humorous to see that you believe that a non-profit only needs to file 2 forms, online, once a year. Those two forms are just the start. There's a lot more paperwork involved.<p>You need to consult a lawyer, immediately, because you may receive a call from the IRS in the near future.