Definition:
A non-stock corporation is a corporation (either for-profit or non-profit) that does not issue shares of stock. A non-profit corporation is non-stock by definition, since the purpose of the non-profit corporation is not to pay shareholder dividends. A for-profit corporation may be non-stock for several reasons:
- The corporation may be closely held (owned by only a few individuals} who have no interest in selling shares.
- The corporation may be formed for a single, short-term purpose or a specific transaction. For example, the corporation may be formed to build an office building or other construction project.
- The corporation may be set up as a non-profit, with members instead of shareholders.
Also Known As: Closely held corporation or private corporation
Examples:
The non-stock corporation was incorporated to build the mall, and it was dissolved when the mall was sold.
