How do you form a nonprofit?
California nonprofit formation begins by filing Articles of Incorporation with the California Secretary of State. The language that is contained in these Articles is very important because it will determine whether the nonprofit will be able to obtain tax exempt status with the IRS, Franchise Tax Board, and Board of Equalization.
In California, there are three types of nonprofit corporations:
- California public benefit corporations
- California mutual benefit corporations
- California nonprofit religious corporations
Each entity type if governed by a separate section of the California corporations code and has different legal requirements.
SLG is able to assist with all aspects of the formation of a nonprofit. The nonprofit formation process is broken down into the following steps:
- Formation of Nonprofit Corporation
- IRS Exemption Process
- State Exemption Process
- Attorney General Registration
Board of Directors:
Once a nonprofit has been formed by filing Articles of Incorporation with the Secretary of State, the nonprofit will need to select a board of directors to govern the nonprofit and officers to manage the day-to-day operations. It is recommended by the IRS that a nonprofit organization have at least (3) three board members.
Bylaws are the governing rules of the nonprofit. It is important that a nonprofit’s bylaws are kept up to date and meet the requirements of the California corporations code. Bylaws should be reviewed by the board of directors periodically to determine whether they need to be updated and whether the impose unreasonable restrictions on the nonprofit that are not being met. An example of this is a nonprofit that has bylaws creating term limits for its directors. If the nonprofit does not comply with these term limits, having bylaws that create these restrictions could cause serious governance issues down the road if someone were to dispute a director’s term. As part of the formation process, Semanchik Law Group will provide you with comprehensive bylaws that will fit your organization’s needs.
Select an Attorney that Understands Nonprofit Law
It is essential to have an experienced nonprofit attorney assist with the formation of your nonprofit organization. At SLG we take the time to guide you through the formation and exemption process. We ensure that you understand the unique tax implications of a nonprofit as well as the importance of proper governance and compliance. Having an attorney that truly understands nonprofit law ensures that your organization will be set up to succeed. We understand that your time is better spent serving your charitable mission and we hope to make the formation and exemption process as easy and informative as possible.
SLG charges a flat fee for the formation of a nonprofit public benefit corporation. This fee may be increased based on the complexity of the matter or additional schedules needed on the 1023 application. These fees can be broken down into installments. Call for a free consultation to discuss the fees for your particular matter.