How To Find A Registered Non-profit In My Area

Footstep by Footstep Guide for Starting a California Nonprofit

Emily-Chan

George T

Attorneys Emily Chan and Gene Takagi explain the steps to starting a nonprofit in California.

Congratulations. You've got an idea for making the world a meliorate identify, and yous want to start a nonprofit every bit the means to do then. The adept news is that starting a California nonprofit isn't that hard to practise if yous have a audio plan, the right team, and sufficient startup capital.

The bad news is that running a successful nonprofit is not easy. Yous'll demand to think through exactly how you will bring value to the public, obtain funds, attract staff and/or volunteers, build a board of directors, and comply with the laws that regulate nonprofits. Your answers to these questions will determine whether you lot should showtime a nonprofit or consider alternatives. More than on these points after in this commodity.

Here are 10 basic steps for starting a California nonprofit public benefit corporation:

one.Make up one's mind the name of the corporation. A nonprofit is typically formed equally a corporation and its name tin be a valuable asset. In California, a corporation name may exist adopted if the name is non the same as or besides similar to an existing proper noun on the records of the California Secretarial assistant of State, or if the name is non misleading to the public. You lot tin check the current database of existing names in the business search page on the Secretarial assistant of Land website (http://kepler.sos.ca.gov/). Y'all tin can likewise reserve a name for 60 days by mailing in a Name Reservation Request (http://www.sos.ca.gov/business organization/corp/pdf/naavreservform.pdf). You must also brand sure the name does not borrow on another person's trademark rights. This is not always piece of cake to determine, just a good showtime includes running a trademark search on the U.Southward. Patent and Trademark Function database and a simple Google search. For some founders, it may also be important to confer with intellectual belongings counsel to assistance ensure they are not infringing on another's rights and to protect their name from being used past other parties.

ii.Draft and file the articles of incorporation. A corporation is legally created with the filing of the articles of incorporation. Articles of incorporation typically identify:

(a) The organization's name;

(b) Purpose or purposes of the nonprofit;

(c) Amanuensis for service of procedure -- that is, a person whose name and accost are identified and who tin receive lawsuits and other official correspondence and other matters; and

(d) Any limitations on corporate powers.

The articles of incorporation are typically signed by an "incorporator," which tin be just one person but may also be signed by the initial board of directors if they are named in the articles.

There are sample articles constitute on the Secretary of Country'southward website (http://world wide web.sos.ca.gov/business organization/corp/pdf/articles/arts-pb.pdf). These are a skilful starting point simply are not comprehensive guides on every of import consideration. For example, the samples provide piddling guidance on specific purpose statements.

A word on specific purpose statements: A broad specific purpose argument provides room for the organization'due south mission to evolve without requiring an subpoena to the articles of incorporation. It may as well brand information technology easier to comply with charitable trust laws that require charitable funds be used consequent with the specific purpose of the organization at the fourth dimension such funds were originally acquired. If, instead, y'all adopt a narrow purpose statement such equally "to restore and maintain Pomponio State Beach," you can't use funds to restore whatever other beaches, but the statement would provide a stronger mission anchor to aid ensure that your organization stays on a specific course after the founders have left.

For additional data on this effect, read Starting a Nonprofit: Manufactures of Incorporation and Specific Purpose Statements (http://www.nonprofitlawblog.com/dwelling/2012/11/starting-a-nonprofit-manufactures-of-incorporation-and-specific-purpose-statements.html).

More about the agent for service of process: Information technology is besides important to understand that the agent is responsible for receiving lawsuits and possibly other important legal documents on behalf of the organization and making sure those documents reach the President or other authorized officer in a timely manner. If the amanuensis fails to practice so (e.g., fails to have his or her post checked regularly while abroad for an extended catamenia) the arrangement could face negative consequences such equally losing a default judgment for not showing upwards to defend a lawsuit. An organization can identify an individual as agent or may elect to pay for a corporate amanuensis, which may be preferred if in that location is no person willing to accept this responsibility or if privacy concerns are an issue (the agent's street address will be a matter of public record).

3. Appoint the board of directors. If the initial directors are non named in the articles of incorporation, the incorporator can and should appoint the board through a written action.

Under California constabulary, a nonprofit lath may exist composed of as few every bit one managing director, simply the IRS is unlikely to grant 501(c)(3) status to a nonprofit with only one managing director and near nonprofits have anywhere between three and 25 directors.

These directors should empathise their duties and responsibilities to human action with reasonable care and in the best interests of the organisation while providing management and oversight over the organization's activities, finances, officers, and legal compliance. BoardSource offers valuable resources on nonprofit corporate governance, including these Ten Basic Responsibilities of Nonprofit Boards (http://www.boardsource.org/Knowledge.asp?ID=iii.368).

four. Typhoon the bylaws and conflict of interest policy. A corporation's bylaws typically accost, at a minimum, fundamental provisions related to the management of the activities and affairs of the corporation. Bylaws should provide guidance to the board and reassurance of audio governance practices to government authorities, funders, and other interested stakeholders.

Bylaws typically incorporate specific provisions detailing:

(a) The purpose or mission of the nonprofit;

(b) How directors are elected or otherwise selected (e.chiliad., by majority vote of directors at the annual lath meeting);

(d) How board meetings are called and noticed (eastward.grand., half-dozen times per yr with 14 days advance detect past email);

(e) How lath meetings are conducted (e.thou., the chair of the board presides);

(f) The officers of the corporation (a president or chair of the board, secretary, and treasurer or chief fiscal officer are required by California police);

(g) The duties and responsibilities of each officer;

(h) The dominance of board and not-board committees (east.g., committees tasked to act with the potency of the board versus committees that can just make recommendations);

(i) The level of indemnification provided by the corporation to protect its directors, officers and other agents; and

(j) The reports due to directors (east.chiliad., financial reports).

If the nonprofit has voting members, the bylaws will also need to contain additional provisions regarding member rights and processes. Nonprofits considering a voting membership construction may want to first talk over such structure with a lawyer, peculiarly if they do not expect their members to actively participate in meetings and regularly exercise their voting rights. Public Counsel provides an Annotated Form of Bylaws for a California Nonprofit Public Benefit Corporation on its website (http://www.publiccounsel.org/publications?id=0060).

Separately articulated policies usually supplement the bylaws in addressing key governance and management issues. For instance, although not required by federal tax law, it is considered to be a best practice for any nonprofit to accept an adopted conflict of interest policy. Additionally, a nonprofit must describe its policy regarding conflicts of interest in the IRS Form 1023. Accordingly, it would exist advantageous for most nonprofits to adopt a policy like to the sample policy provided in Appendix A of the Instructions to Class 1023 (http://www.irs.gov/pub/irs-pdf/i1023.pdf).

v. Take the initial board deportment at a board meeting or by unanimous written consent of the directors. The board should accept the following deportment:

(a) Adopt the bylaws and conflict of interest policy;

(b) Elect officers;

(d) Approve establishing a bank business relationship;

(e) Approve applying for federal and state taxation-exempt status;

(f) Approve reimbursement of startup expenses (if applicable); and

(k) Corroborate the compensation of the executive managing director (CEO) or the treasurer (CFO) (if applicable).

6. Obtain an employer identification number (EIN). An officer or authorized third party designee may apply for and obtain an EIN online (http://www.irs.gov/Businesses/Small-Businesses-&;-Cocky-Employed/Employ-for-an-Employer-Identification-Number-(EIN)-Online).

vii. File the initial registration class (Form CT-ane) with the California Attorney General's Registry of Charitable Trusts. This almanac registration is required for the majority of nonprofit public do good corporations and must exist filed within 30 days after receipt of assets. The Form and Instructions are available online (http://oag.ca.gov/charities/forms). The corporation'southward articles of incorporation and bylaws should be included in the initial filing. The Class 1023 application and federal determination letter (Stride 9) should exist submitted upon receipt of the determination letter to complete the filing. Cheque out this livestream webinar from the Chaser General's function on March 26th at 1pm: https://oag.ca.gov/charities/initialregistration-live.

eight. File the Argument of Information (Form SI-100) with the Secretary of State. The Statement must initially exist filed within xc days of the date of incorporation. This biennial filing requirement, which identifies the organization's address, principal officers, and agent for service of process, can be filed online (https://businessfilings.sos.ca.gov/) or by mail service.

9. Utilize for federal revenue enhancement exemption with the Internal Acquirement Service (IRS) and receive a determination alphabetic character from the IRS. Completing the Form 1023 awarding for exempt status under Internal Revenue Code (IRC) Section 501(c)(3) (http://world wide web.irs.gov/pub/irs-pdf/f1023.pdf) may be the about challenging part of the startup process. Information technology is a legally-driven and comprehensive inquiry roofing xi Parts and viii Schedules. A critical section for conscientious completion is Part IV, Narrative Description of Your Activities, which asks (http://world wide web.irs.gov/pub/irs-pdf/i1023.pdf):

For each past, nowadays, or planned activity, include information that answers the following questions.

- - What is the activeness?
  - Who conducts the activity?
  - When is the activity conducted?
  - Where is the activeness conducted?
  - How does the action further your exempt purposes?
  - What percent of your total time is allocated to the action?
  - How is the activity funded?
  - List any alternate names nether which you operate, including any "aka" (also known as) or "dba" (doing business organisation as) names.

Course 1023 likewise requires data regarding (a) organizational structure; (b) compensation and other financial arrangements with officers and directors, and certain highly paid employees and contained contractors; (c) members and other individuals and organizations that receive benefits from the organization; (d) organizational history (e.1000., an system that was spun off or previously fiscally sponsored by another organization may need to complete an additional schedule as a successor organization); (due east) specific activities; and (f) bodily and/or projected statement of revenues and expenses (which should be consistent with any identified activities).

Part X is designed to determine the organization's nomenclature as either a private foundation or a public clemency. Public charity condition is mostly the more than favorable tax condition, merely requires an organization to meet certain requirements. For most organizations, this means passing a public back up test over a 5-twelvemonth measuring period. For organizations that will receive a large bulk of their support from few sources over their first 5 years, monitoring and managing of the public support ratio may be critically important. Public Charity Status Simplified (a piddling) is a helpful online resource from Insight Centre for Customs Economic Evolution (http://www.insightcced.org/uploads/publications/legal/public_charity_status_simplified.pdf).

The filing fee for Form 1023 is currently $850 for all but the smallest organizations.

The IRS may typically have three-four months or longer to process a Form 1023 application for exempt status. Notwithstanding, the waiting catamenia may be much longer if the application contains errors, omissions, or other information that require additional development by a special IRS department. The IRS application process is farther explained on its Where Is My Exemption Application website (http://world wide web.irs.gov/Charities-&-Not-Profits/Where-Is-My-Exemption-Application%3F).

10. Apply for California tax exemption with the California Franchise Tax Board (FTB) and receive an affidavit of exemption letter from the FTB. Organizations with a 501(c)(iii) federal determination letter tin can request California affirmation of tax exemption nether California Revenue & Taxation Lawmaking section 23701d from the FTB by filing Form 3500A along with a copy of the IRS determination letter of the alphabet. The FTB volition recognize the system's exemption from state income taxes as of the federal effective date. An organization that does not take a 501(c)(three) federal decision letter is otherwise required to file the more than complicated Class 3500 for country income revenue enhancement exemption. There is no fee for Form 3500A and a $25 fee for Form 3500.

You can detect a downloadable form at

https://www.ftb.ca.gov/forms/misc/3500a.pdf

Practice you need to work with an attorney to starting time a nonprofit?

Although the majority of nonprofits are set up without the assist of lawyers, it'due south easy to brand mistakes that become costly to correct afterward (such every bit unwisely creating voting membership structures, adding unlawful provisions to template bylaws, violating the commerciality doctrine, etc.). Nosotros recommend having experienced professionals involved -- such every bit attorneys, board members with nonprofit incorporation experience, and experienced consultants. Don't discount the value of a knowledgeable chaser.

Should You Showtime a Nonprofit?

Now that you lot know how to outset a California nonprofit, you should thoughtfully consider whether this is the right selection for your ideas and for the public benefit. There may be other ways to conduct out your dreams, including working under the umbrella of an existing nonprofit, Come across Alternatives to Forming a Charitable Nonprofit (http://apps.americanbar.org/buslaw/blt/2009-07-08/takagi.shtml). 1 often overlooked culling is financial sponsorship, a relationship that may permit a group to house a charitable project within an existing nonprofit with the ability to spin it off at a subsequently date. For more information on fiscal sponsorship, see Financial Sponsorship Basics from the Bar Association of San Francisco. (http://world wide web.sfbar.org/forms/vlsp/financial-sponsor-memo.pdf)

Almost Emily Chan and Cistron Takagi:

Attorneys Emily Chan and Gene Takagi wrote this guide for the California Clan of Nonprofits every bit part of their pro bono work.

Emily Chan, an acquaintance with the NEO Constabulary Group, was recognized every bit the 2012 Outstanding Nonprofit Lawyer – Young Attorney by the Nonprofit Organizations Committee of the American Bar Association. Gene Takagi is managing attorney of the NEO Police Group, an offshoot professor at the University of San Francisco, and contributing editor of the Nonprofit Law Blog.

You can reach them at www.neolawgroup.com or 415-977-0558.