Non-Profit Law Guide
In this guide, you will find information on nonprofit law. Non-profit law is complicated and usually undertaken with the assistance of a lawyer.
Is Your Nonprofit Organization Seeking Corporate Status?
Articles of organization.
Here is a list of some of the information you will need for the articles of organization document:
- Exact name of the corporation
- Purpose(s) of the corporation in line with Massachusetts General Laws Chapter 180 Section 4 and, if seeking federal tax-exempt status under I.R.C. § 501(c)(3), MUST be limited to Section 501(c)(3)’s exempt purposes
- Types and classes of stock and the total number of shares and par value, if any, of each type and class of stock which the corporation is authorized to issue
- Street address (post office boxes are not acceptable) of the principal office of the corporation in Massachusetts
- Name, residential address, and post office address of each director and officer of the corporation
- End date of the fiscal year of the corporation
- Name and business address of the resident agent, if any, of the corporation
- If seeking federal tax-exempt status under I.R.C. § 501(c)(3), MUST INCLUDE no inurement of assets or net earnings provision stating that, upon dissolution, remaining assets are used exclusively for exempt purposes
What are Section 501(c)(3)’s exempt purposes?
Charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals
File the articles of organization with the secretary of state (or with the help of your lawyer). The filing fee is $35.
Obtain a certified statement of the fact of incorporation by the secretary of state.
Hold an organizational meeting to adopt by-laws and to elect initial directors, a president, treasurer, and clerk. You may also elect or appoint any other officers and a resident agent.
As mentioned in Step 4, adopt by-laws, which are required under state law and are state law driven.
Here is a list of what by-laws may include:
- Name and purposes
- Fiscal year
- Location of principle office in Massachusetts
- Members provisions, if any, as Massachusetts law does not require nonprofits to have members; If members, what constitutes a “member,” how selected, term of membership, meetings, voting rights, responsibilities, duties, etc.
- Directors—number, qualifications, how selected/elected, term of office, vacancies, resignation, how removed, powers, compensation, meetings, notice requirements
- Officers, agents, and employees—number, how elected, term, qualifications, vacancy, resignation, how removed, chair, president, treasurer, clerk, additional powers and duties, agents and employees and their compensation
- Inspection of records
- Conflicts of interest—policy and annual statements
- Personal liability, indemnification, and insurance
- Manner of calling and conducting the corporation’s meetings
- Amendment of by-laws—who and how
- No inurement of assets or net earnings provision
Keep minutes of each meeting of members or directors.
Secure certificate of authority from other states in which the organization will operate.
In order to operate within a state, get any licenses or permits a specific state, county, or city may require.
Prior to soliciting contributions in Massachusetts, or having others solicit contributions on its behalf, a charitable organization must obtain a valid Certificate of Solicitation from the Non-Profit Organizations/Public Charities Division of the Attorney General's Office (AGO). This Certificate must be renewed on a yearly basis.
To receive or renew your Certificate of Solicitation, you must complete Schedule A-1 and Schedule A-2 of the Form PC and submit it to the AGO, along with the rest of Form PC, other required attachments, and the appropriate filing fee. No fee in addition to the Form PC filing fee is required.
Seek federal tax-exempt status through the IRS. Your lawyer will help you apply to the IRS for nonprofit status.
Tax-exempt status is automatic for:
- Churches, their integrated auxiliaries, and conventions or associations of churches; and
- An organization that is not a private foundation and the gross receipts (total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses) of which in each taxable year are normally not more than $5,000.
Section 501(c)(3) tax-exempt organizations utilize Form 1023 or 1023EZ.
Here is a list of some of the information you will need to start to collect for your attorney for Form 1023:
- An Employer Identification Number (EIN) (Your lawyer can also help you obtain this.)
- Articles of organization, as well as certification of filing
- Form 2848, Power of Attorney and Declaration of
Representative, if represented by an authorized representative
- Organization’s website
- Date of incorporation or date formed depending on corporate status
- By-laws or, at the very least, an explanation of how your officers, directors, or trustees are selected
- Form 1023 has a two-part organizational test that you must pass à articles of organization (1) stating your exempt purpose(s) and (2) stating that, upon dissolution, remaining assets are used exclusively for exempt purpose(s)
- Past, present, and planned activities in a narrative
- Names, titles, and mailing addresses of all of your officers, directors, and trustees, as well as each person’s total annual compensation or proposed compensation
- Names, names of businesses, and mailing addresses of your five highest compensated independent contractors that receive or will receive compensation of more than $50,000 per year
- Conflict of interest policy
- Non-fixed payments, such as discretionary bonuses, if any
- Information concerning the purchase or sale of any goods, services, or assets
- Information concerning any leases, contracts, loans, or other agreements
- Whether you are a successor to another organization
- Fundraising programs, if any, you do or will conduct
- Contributions, if any, you do or will accept
- Grants, loans, or other distributions, if any, you do or will make to organization(s)
- Financial data including projections, which includes revenues or expenses, assets, liabilities, fund balances or net assets
Prepare required documents to attain state tax exemption.
File information returns ANNUALLY, generally on Form 990 or 990-EZ.
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
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