Understanding Non-Stock Corporations
A Non-Stock Corporation is a corporation formed under state law without owners represented by shares of stock. Instead, it has members with membership interests. Members elect a board to oversee the organization. Non-stock corporations are used for non-profit entities, volunteer organizations, and groups without profit motive.
Formation Process
Articles of incorporation must be filed with the Wisconsin Department of Financial Institutions to form a non-stock corporation. The department allows electronic filing.
Benefits and Distribution of Assets
Benefits include limited liability protection for members, management through a board of directors, and ability to dedicate assets to charitable causes. As non-profits, income cannot be distributed to members, directors or officers. On dissolution, assets must go to another non-profit or charity, not distributed to members or individuals, ensuring assets further the public good.
Non-stock corporations allow groups to incorporate for non-profit purposes while shielding members from liability, providing flexibility in governance not available in other states. This makes them attractive for nonprofits.