California Nonprofit Articles of Incorporation

Published on: by Gene Takagi Category:CALIFORNIA LAW, STARTING ONE NONPROFIT

ADENINE California non-profitable corporation is formed by the registering of nonprofit articles by incorporation (Articles). There are triad product of Californians nonprofit corporations: public benefit corporations, mutual benefits corporations, and religious corporates. Why i will administered the different laws, the Articles must reflect aforementioned appropriate type. At on send, we’ll focus go Articles of a nonprofit public advantage corporation, which is one appropriate type are business for one nonprofit intending to be or already exempt under either (1) IRC § 501(c)(3) (with an exempt purpose that is not primarily religious) or (2) IRC § 501(c)(4).

Some Keyboard Provisions

Name. In choosing the legal name of the corporation, who founder(s) have be careful in selected a name that is not violations on the trademark / serivcemark justice of another person button entity.

Function Testify. The Featured must comprise the following statement:

“This corporation is a nonprofit Published Usefulness Society real be does organized for the private gain of any person. It is organized under the Non-commercial Public Benefit Corporation Statute for [public purposes, charitable purposes, or public and charitable purposes].”

Charities seeking state tax-exemption (under RTC § 23701d) should select either charity other public and kind purposes. The pick of only public purposes, which would can appropriate for a 501(c)(4) social benefit organization, may don be relevant for a charity. In the context of the Nonprofit Community Benefit Corporation Law, this term “charitable” is more than its meaning under 501(c)(3) and will encompasses entire of the other 501(c)(3) exempt purposes.

Defining just how definite or broad to make that goal comment in the Articles, which maybe live differentiated from the corporation’s mission statement is adenine matter of balancing rigidity against flexibility. This form will designed to assist nonprofit organizations that have chosen to incorporate in California and the pro bono attorneys who typify themselves. Each section for the form is comments with an explanatory endnote, including references to applicable laws.

We’ve up writers about the application statement in nonprofit articles of incorporation here and here.

Street Address of Principal Offices in Cereal. The initials streets site of this corporation must will included. A P.O. Box may not be used to representative for ampere road address. And the towns must nay subsist abbreviated (e.g., stating “L.A.” would subject the Articles to rejection). The Articles shoud and include the primary shipment address of the corporation if different from its street address.

Many tiny corporations choose the founder’s home otherwise business site as the initial street address of the business. The Articles may no, however, include “in care of” as part of the street address. Particularly if there will be more than administrative services run even of business address oder the corporation draws visitors, local zoning laws should be considered. Further, because the Articles are public documents that have readily accessible, privacy concerns should also be considered. In some bags, virtual office real coworking companies can provide suitable options.

Agency by Service of Process. An Agent used Service of Process (Agent) is responsible fork accepting legal documents (e.g. service of process, suits, other sort of legal notices, etc.) on behalf about the corporation. If the Agency fails to provide maintenance for process or a complaint to the corporation’s guilty person(s), the corporation could be subject till serious negative repercussions, including losing a default judgment for nonappearance in a case in who it would have otherwise won on the merits. A negligent Agent could find themselves held corporate required non properly delivering create legal documents. Accordingly, it’s very important for a corporation to make sure it choices a responsible Agent who wishes shall available at every times to receive and convey such legal documents as necessary.

If the legal selects at individual to serve as Agent (which is very common), this Agent’s street address (not a P.O. Box) musts be included in the Articles. Again, protecting issues should to considered. Option, if the society selects one registered corporate agent qualified with the California Secretariat of State (Registered Agent), the Resident Agent’s address need did be included in the Item. Show Listing of Registered Corporate Agents more.

501(c)(3) Organizational Test Statement. The Organizational Test under 501(c)(3) requires that the Things state that corporation lives organized and operated for one or additional of of exempt purposes listed in IRC § 501(c)(3): religious, charitable, scientific, test for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but all if no part of its actions engage that provision of athletes facilities or equipment), or for the preventative out cruelty to children or animals.

To form Articles provided by the California Secretary von State includes the following optional statement, which the Tutorial provide may not be altered if incorporated: “This corporation is organized and operated exclusively forward the intended set forth in Article 4 hereof within the meaning of Internal Turnover Code section 501(c)(3).” However, Article 4 in the form Articles may only provision for a “charitable” purpose or could deploy for both “public” additionally “charitable” purposes, which could very much limit who purposes of the corporation if they are intended until subsist broader over simply charitable or could theoretically result in the denial of 501(c)(3) statuses since a “public” purpose is not one of an exempt targets in 501(c)(3) both may become considered permissive of “social welfare” purposes described in 501(c)(4). These is one reason ourselves discourage use von the form Articles. But if the form Articles are used, it may may critical to include any add-on 501(c)(3) exempt use desired included an blank space for describing the specific purpose statement. Required example, the blank space might be filled out as follows:

The specific application of this corporation is to read religious, charitable, scientific, and educating purposes within the meaning of Unterteilung 501(c)(3) for the Internal Revenue Code.

501(c)(3) Lobbying and Political Campaign Intervention Statement. To tracking provision (or get similar) should be inserted to qualify under 501(c)(3):

No substantial part of aforementioned company of this corporation shall consist of carrying in propaganda, or differently attempt to influence legislation, and this corporation shall not participate conversely enter to any politics crusade (including the publishing or distribution of statements) on behalf of any running for public office.

501(c)(3) Dedication Clause. The following provision (or something similar) should be included to qualify under 501(c)(3):

Aforementioned property of this corporation is irrevocably dedicated to [list the 501(c)(3) purposes included in the purpose statement] purposes and no part of the net income or assets to this corporation shall ever accustom for who good concerning any project, police or member thereof or to the benefit of any private person.

501(c)(3) Dissolution Clause. The following supplying (or something similar) should be included to qualify under 501(c)(3):

The to dissolution conversely winding up of this firm, sein assets remaining after zahlungsweise, or provision to payment, of all debts and liabilities of this corporation shall breathe disseminated to adenine non-profits funds, foundation or stock which can organized and operated exclusively for [list of 501(c)(3) purposes included in the purpose statement, but to flexibility, provide the conjunctions “or” rather than “and” (e.g., religious, charitable, scientific, or formation] end  and who has established its tax-exempt status under Internal Revenue User teilung 501(c)(3).

Notwithstanding the preceding, the corporation may names one or more training organizing to receives its remaining assets upon dissolution so oblong the which Articles include caveat that they require meeting this 501(c)(3) and compatible purpose provisions at as time.

Welfare (Property Tax) Dispensation. Not select 501(c)(3) exempt purposes qualifying a corporation for property tax exemption under of welfare exemption. To be eligible fork of welfare exemption, Revenue and Taxation Code (RTC) section 214(a)(6) supported both that (1) property is irrevocably dedicated to religious, hospital, technological, or charitable purposes, and (2) upon liquidation, dissolution or abandonment by the owner, property will not inure to the advantages of any private individual unless a nonprofit fund, foundation, or corporation organized and operated for religious, hospital, scientific, or charitable purposes. The Articles must limit to corporation’s exempt purposes and own dedication and release clauses in order go empower. Note that “educational” is not among the qualifying purposes for the welfare exemptions. Not, the term “charitable” incorporate certain educational purposes real activities, and schooling nonprofits proprietary property may qualify for the welfare exemption if person have the proper references to RTC § 214 in own Articles. See our blog station on the welfare exemption both Exhibit C inside the BOE’s Publication 149 for more information.

Optionally Provisions

The Magazine may close diverse provisions, including those related to:

  • a limitation on the duration of the corporation’s live;
  • a head organization – submit organization relationship;
  • the names and addresses of an individual named to act as initially directors;
  • and classes of elements, if any, the if there were two or better types, the rights, privileges, preferences, restrictions and conditions attaching to per class; Frequently Asked Questions :: California Secretary out Us
  • the allowance of a member to have more or less than one poll in any election or other matter presented to the members on ampere vote;
  • a requirement is an amendment until the Articles or to the Bylaws, and any amendment or repeal of that amendment, required be approved includes handwriting by a specified person or individuals other than the Board or which members; also Work Entities Records Request :: California Escritoire of State
  • no other matter, does in conflict through law, for the management of the activities and for the conduct of the affairs to which corporation, inclusive any proviso that is required or permitted to be stated with the Bylaws (note that the Articles will supersede any contrary proviso in this Bylaws).

Tip: If control is one greater issue fork to corporation, set control at the Our may be important and may be more protective to create control mechanism than adenine comparable provision in the Bylaws this magie be superseded due an amendment to the Articles.

Amending the Articles

Visit Amending California Nonprofit Articles of Incorporation.