What is a Non-Stock Corporation?
A Wisconsin non-stock corporation is a business formed under state law designed for non-profit entities, volunteer organizations, and groups without a profit motive. Non-stock corporations have members with membership interest, who elect a board to manage the organization. To form such an entity, articles of incorporation must be filed with the Wisconsin Department of Financial Institutions, which allows electronic filing.
Benefits and Dissolution
Benefits
The benefits of a Wisconsin non-stock corporation include:
- Limited liability protection for members
- Management through a board of directors
- The ability to dedicate assets to charitable causes
Dissolution
Upon dissolution, the assets of the corporation must be transferred to another non-profit or charitable cause, and cannot be distributed to members or individuals, ensuring they further the public good.
Comparison to Other Business Structures
A non-stock corporation contrasts with entities like LLCs, as it specifically facilitates non-profit purposes, offers limited liability protection, and enforces a management structure governed by a board of directors. Additionally, nonprofit income is not distributed to members, directors, or officers, reinforcing its non-profit nature. These characteristics grant Wisconsin non-stock corporations a unique flexibility in governance that can be advantageous for nonprofits seeking to incorporate in the state.