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Comment by Feld0 | Hacker News Reader

That's exactly what a nonprofit is. Nonprofits are corporations like any other, with a few key differences:

- Instead of shareholders, nonprofits have members. Members don't own the corporation (no one does) but control it insofar that they hire-and-fire its directors.

- Memberships normally can't be sold, and nonprofits have no equivalent to dividends.

- There are stronger conflict-of-interest protections, preventing officers from signing cheques to themselves or otherwise using the corporation's resources for their personal benefit - at least without someone else's approval.

A typical setup for nonprofits is to tie memberships to being a director, so that current board members choose their own successors. This is known as a "self-perpetuating board".

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IIRC non-profits can't make and keep profits. Corps can, hence Mozilla Corp. They can keep profits around in order to.. like, purchase Pocket, or simply pay employees later when Mozilla makes less profit, or whatever else.

These things are hard or maybe impossible in a non-profit (IANAL/correct me if I'm wrong)

> IIRC non-profits can't make and keep profits.

Non-profits can make surplus revenues over costs and retain them; they can't return profits to shareholders or other particular beneficiaries.

Certain classes of nonprofits are restricted from certain business activities, or limited to certain activities. E.g., charities (501c3 nonprofits) must be organized and operated exclusively for purposes on an list of charitable purposes.

Yes, nonprofits can charge money and hold onto it. What they can't do is distribute it to shareholders. Many universities are nonprofits, and they hold on to millions or billions of dollars. Nonprofits can also acquire companies, etc.

The terms "nonprofit" and "not-for-profit" are unfortunate misnomers. Like any other company, nonprofits can offer gainful employment and will eventually bankrupt if they never turn a profit.

Yes, something like that but without the need to create a separate foundation and corporation.

AFAIK, Mozilla has the structure they do because the IRS frowns upon charities (which is shorthand for "tax-exempt corporation") engaging in business-like activities but is fine with charities owning for-profit companies as a source of income (and like any shareholder can do, direct the for-profit company to benefit its owner).

Regional differences may be relevant here: in Canada, you can incorporate a nonprofit corporation and later apply for charity status (which restricts the company's possible activities in exchange for a 0% income tax rate) but it's completely optional.

In the US, on the other hand, to the best of my knowledge, one has to establish a for-profit entity first and then apply to the IRS to recognize it as a charity (which is a lengthy process). The words "charity" and "nonprofit" are interchangeable in the US for that reason.

If the concept of a non-charitable nonprofit exists in your jurisdiction, you can get the benefits of a nonprofit structure (ie. no owners) without restricting the company's activities, minus tax exemption and being able to issue tax receipts.

For context: I founded a non-charitable nonprofit in Canada; I'm not super familiar with the US side of things so I'm happy to be corrected.

> in Canada, you can incorporate a nonprofit corporation and later apply for charity status

The US works similarly. You incorporate as a nonprofit, but you have to separately apply for tax-exempt status afterwards. If you don't, you're a nonprofit without the benefits of being tax-exempt.

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