Non-Profit and Charitable Organization Business Transactions
May 09, 2016
NOELLE MINTO, ESQ.California law regulates the activities of non-profit and charitable organizations, and charitable organizations may also be covered by federal law if they want to receive tax-deductible gifts from donors. NM Law can help these organizations to be compliant with all of the laws and regulations which govern their organizational structure, and the requirements for filing quarterly and annual reports. Organizing a non-profit or charitable organization in California requires knowledge of the laws and the process is easy compared to the process of ensuring that the organizations stay compliant.
These organizations must abide by the laws which govern the appointment of officers and the members of the Board of Directors. The laws also cover the amount of limited compensation that can be paid to officers. If the organization pays anyone, then their names must be reported to the state.
The laws dictate the types of activities that organizations can engage in. As an example, tax-exempt charitable organizations cannot engage in lobbying or any other political activity. Organizations that engage in activities that depart from their charter may lose their tax-exempt tax. Charitable organizations that can receive tax-deductible contributions may also lose their status if they engage in prohibited activities. NM Law can advise organizations on a range of issues including excise taxes, unrelated business income, reasonable compensation questions, and allowable activities. She can also provide advice on matters related to fundraising and borrowing money. With her wide experience involving many types of organizations, NM Law can ensure that an organization can be protected from engaging in activities that will disrupt its public service mission. The business transactions of non-profit and charitable organizations are especially subject to laws and regulations.
Forming a new non-profit or charitable organization requires several important steps. Among these is the creation of the articles of incorporation which will set forth the purpose of the organization and other relevant information such as where how it will work. By-laws must also be created, and these will establish how the organization will function and by what rules. Both of these documents should provide assurances to the governments and to financial contributors that the organization will abide by all of the laws which govern it. NM Law can assist with the creation of these documents and ensure they are filed with the correct offices. She can also help an organization obtain the 501(c)(3) designation which will enable it to receive income tax-deductible contributions. New organizations must file for the tax-exempt status in California and with the federal IRS, which will allow the income of the organizations to be exempted from state and federal taxes.
Disclaimer: This article is intended to provide a general summary of laws in the State of California and should not be construed as a legal opinion nor a complete legal analysis of the subject matter. Noelle Minto is an attorney at NM Law, APC in Tustin, California, a law firm specializing in Trusts & Estates and Business Transactions.
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