How to file a complaint against a nonprofit organization in california
How to start a nonprofit in California - 501c3 Organization
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How to form
a 501(c) (3) nonprofit corporation.
A nonprofit corporation is purpose-driven,
a company whose goal is not to make profit for themselves.
Typically, they are an organization
that wants to make money
in order to help further a social cause
or provide a public benefit.
Let's get you started on the right path
to forming a nonprofit corporation in California.
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If you're not sure what a nonprofit is,
check out our other video,
"What Is a Nonprofit?" linked below.
How do you form a nonprofit corporation?
There are two ways.
You can do it yourself,
or you can hire a service to do it for you.
Let's take a look at both options
and help you decide how to go
about forming your own nonprofit corporation.
Option one, do it yourself.
If you want to save money, you can form
a nonprofit corporation on your own.
Let's take a look at the steps
to forming a nonprofit corporation on your own.
One, choose and secure your nonprofit's name.
The name you select for your nonprofit
will establish its brand.
It's the first thing most people
will learn about your organization.
It's important to pick a name
that both aligns with your mission
and follows the rules of naming guidelines in California.
You'll need to check California's
specific naming requirements,
but in general, follow these rules
when choosing a name.
The name you pick for your organization
should not include words or terms that could be
considered grossly offensive or misleading.
The name must be distinct
from that of any other corporation in California.
For more information on what makes a name distinct,
check out our other video,
"How to Name Your Business in California," linked below.
Once you have a name selected,
do a name search to make sure it's available in California.
After doing a California name search,
you'll want to do a domain search
to see if your name is available as a URL.
Even if you don't plan on making a website today,
you may want to secure the URL
so someone else doesn't take it.
Two, choose your California nonprofit's structure.
Nonprofits in California have
four corporate structure options to choose from.
Each has a separate purpose,
tax-exempt potential, and articles of incorporation
form to fill out.
Option one, mutual benefit.
Mutual benefit nonprofits are not eligible
for federal or state tax exemptions.
These organizations may not make the public think
that the organization's purpose is charitable,
religious, or for public benefit.
In addition, it can not imply
that it is a charitable foundation.
Some examples of mutual benefit corporations
are labor unions, teacher associations,
and community clubs.
Option two, public benefit.
Public benefit nonprofits are eligible
for federal or state tax exemptions.
Public benefit nonprofits are designed to function
as a civic league, social welfare organization,
or designed to be a charitable organization.
Option three, religious.
Religious nonprofits primary purpose is to function
as a religious organization
or for religious purposes.
Option four, common interest development.
Common interest development nonprofits are required
to follow the guidance set forth
in the Davis Stirling Common Interest Development Act,
which is linked below.
These nonprofits include organizations
such as homeowners associations.
Three, appoint a registered agent.
The register agent can be an individual
within the company, including yourself,
or you can hire a professional service
authorized to do business in California.
They will send and receive legal papers on your behalf.
These documents include official correspondence,
like legal summons and document filings,
which your registered agent will receive
and forward to you.
Your registered agent will also help remind you
to file the necessary reports.
Failure to properly maintain your nonprofit
can result in fines and dissolution,
so this assistance is valuable.
Four, select directors and officers.
Your nonprofit corporation will be made up
of some number of directors and officers.
The directors of a nonprofit are responsible
for overseeing the operations of the organization.
Together, they form the board of directors.
The power and influence of the directors
over the organization comes from them as a board.
The directors themselves do not have
any authority as individuals.
The board typically creates the policies
that govern the nonprofit.
They also oversee management-level hiring,
such as the company officers.
The officers of a nonprofit,
such as the president or secretary,
are individuals with responsibilities
and the authority to execute based
on their job description.
Together, the officers on the board will come together
to make up the organizational structure of your nonprofit.
An officer may also be on the board of directors
and serve both roles if allowed to do
so by the organizational bylaws,
which we will discuss later.
If your organization plans to apply for 501(c)(3) status
for federal tax exemptions,
it must elect at least three directors
not related to each other,
a president and or chair of the board,
a secretary, and a treasurer or chief financial officer.
Note that the president may not
also hold the office of secretary or treasurer.
Five, file the articles of incorporation.
To form profit corporation,
you will need to file official papers with California.
In California, this is called the articles of incorporation.
Some possible information in the articles of incorporation
you may have to include it is corporate name,
business address, registered agent and registered
office, purpose statement,
additional statements, and signatures.
For more information on the sections
of California's articles of incorporation,
check out our page linked below.
Six, operating procedures and housekeeping.
Within 90 days of filing the articles of incorporation,
you must file the state
of information form SI-100, linked below.
This can be done online or by mailing in the form
to the secretary of state.
After filing the state of information,
you'll want to start getting the structure
of it together and determine how
your nonprofit will be run,
starting with the bylaws and conflict of interest policy.
Your bylaws are the rules that determine how
your organization will be governed and run.
You can think about it as a constitution
for your nonprofit.
It makes the rules and priorities clear
for everyone involved.
In your bylaws, be sure to include
how the nonprofit will be governed,
the roles of directors and officers,
how meetings are held, voting procedures,
electing officers or directors,
how records will be kept and managed,
how disputes will be handled,
and how bylaws will be added and amended in the future.
When you're ready to get started,
check out some bylaws templates linked
in the description below.
The conflict of interest policy are the rules set
to ensure that decisions being made
for the nonprofit are based
on what is best for the organization
and not being motivated by what is best for individuals.
You'll want to make sure you have a draft
of both the bylaws and conflict of interest policy
before your organizational meeting.
We have templates of both bylaws
and conflict of interest policy linked
in the description below.
An organizational meeting is
the first official meeting of your nonprofit.
Some of the things that are discussed
in a typical organizational meeting are
taking attendance to show you have a quorum,
appointing temporary officers and chairmen,
adoption of bylaws,
and adoption of conflict of interest policy.
It's important to record minutes of the meeting
and have it signed by all attending directors.
We have some corporate minutes templates
linked below to help you get the ball rolling.
After your nonprofit has been formed,
you'll need to apply
for an EIN or employment identification number.
An EIN is like a social security number
for your nonprofit.
And it's used for things like filing
for 501(c)(3) status, opening a bank account,
applying for tax exempt status, and submitting tax returns.
For more information on EINs,
check out our other video linked below.
Seven, apply for 501(c)(3) status, federal tax exemption.
What is federal tax exempt status?
And why do you want it?
When a corporation generates income,
that corporation has to pay a federal income tax.
As a nonprofit, your goal is to generate income
that is used to help further a cause,
rather than fill the pockets
of the company employees.
Because of this, the federal government allows
that nonprofits' income not be taxed
so that more of the money can go towards the cause
that the nonprofit is supporting.
Before your nonprofit can apply
for 501(c)(3) status,
it must file the articles of formation
with the required provisions,
adopt the bylaws and conflict of interest policy,
and have an EIN number.
In order to file for tax exempt status,
most organizations will need to file form 1023 online
or by mail and pay a fee of $600.
If your organization's annual gross receipts are
below $50,000, then you may be able
to file form 1023-EZ with a fee of $275.
You can check your eligibility with the link
in the description below.
Once you have received your 501(c)(3)
determination letter from the IRS,
you can file for state franchise
or income tax exemption using form FTB-3500A,
which is linked below.
Option two.
The second way it's a form a nonprofit is
to hire a professional service
to create your nonprofit for you.
Hiring a professional service to file your forms
and act as your registered agent
for the nonprofit will cost you
an additional 50 to $150.
This fee only covers formation of a nonprofit corporation.
If you wish for the professional service to file
for 501(c)(3) status,
the cost may go up to as much as $1,700 plus filing fees.
However, there are several benefits to working with a pro.
A hired registered agent helps
with getting your reports filed on time,
helps you stay organized
by keeping your business mail separate,
and is available at all regular business hours
to accept official mail
and legal papers on your nonprofit's behalf.
If you want to form an organization or company
in California with the purpose being to help a cause
rather than make a personal profit,
a nonprofit corporation is the best way to do that.
Now you know all the steps
to form a nonprofit in California.
For a more detailed guide,
visit our site at StartupSavant.com.
Give the video a like if you found it useful
and subscribe if you'd like to see more.
If you have questions or encounter any roadblocks,
leave a comment below.
Good luck in starting your nonprofit.
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