Non-stock corporation

A non-stock corporation (or nonstock corporation) is a corporation that does not have owners represented by shares of stock,[1] in contrast to a joint-stock company. A non-stock corporation typically has members who are the functional equivalent of shareholders in a stock corporation. The members may have the right to vote (and other rights) based on the bylaws of the corporation. Non-stock corporations may also choose to have no members.

The vast majority of not-for-profit corporations are non-stock corporations. (Some states, such as Kansas, allow nonprofits to issue stock.[2] For example, the Cato Institute is set up this way.[3]) While rare, it is also possible for a for-profit corporation to be a non-stock corporation.[citation needed]

In many jurisdictions, a nonstock corporation can elect to become a stock corporation if certain conditions are met. For example, the Cato Institute was once a nonstock corporation under Kansas law that elected to become a stock corporation.[3]

  1. ^ Goldmark & White; Godfrey Goldmark; Frank White (1913). White and Goldmark on non-stock corporations. New York Public Library: Baker, Voorhis. p. 3.
  2. ^ http://www.lawforchange.org/NewsBot.asp?MODE=VIEW&ID=2346
  3. ^ a b "Cato" (PDF). The Washington Post. Retrieved 23 September 2023.