Help Guides - Page 6
Are nonprofit board members and officers protected from personal liability? What does this mean?
In short, yes. As long as it maintains its status as a corporation, a nonprofit’s board members, officers, and employees are generally not personally liable for the corporation’s debts or other liabilities. This means that contractual obligations, such as loans and property leases, remain in the name of the corporation, and only the corporation will...
Nonprofit structure: What is a board of directors? What are voting members and corporate officers?
Nonprofits typically have one of two basic structures. The most common is to simply have a board of directors to control governance matters as well as officers to manage the nonprofit’s day-to-day operations. The second structure is the same except that there are also voting members who elect the board. While voting members add an additional layer o...
What do nonprofits need to file annually or quarterly?
Nearly all nonprofits are required to file Form 990 annually with the IRS. Those that have income below certain thresholds may be eligible for filing more condensed versions of this form. Nonprofits may also be required to file a number of annual reports with the state governments where they operate, possibly including financial reports, fundraising...
How long does the incorporation process take?
The length of the incorporation process varies widely depending on the state in which you choose to incorporate. In most states, the average turnaround time is roughly 10 days; however, it may take up to three or four weeks in some states. For this reason, many nonprofits choose to use expedited filing in order to start operating more quickly. With...
How do I choose a name for my business?
When completing your articles of incorporation you will need to indicate a unique name for your business. The name should not lead consumers to confuse your business with another business already in existence, especially if that business operates in the same region or industry in which you plan to conduct business. Best practice is to shortlist your...
What documents are necessary to form an LLC?
Formation To form an LLC, complete and file your articles of organization (sometimes called a certificate of formation). Governance Although you do not need to file an LLC operating agreement, this is a core document that defines who owns the LLC, how it will be managed, how the membership will handle profits, and more. Ownership Although many LLCs...
Do nonprofits need to hold regular corporate meetings?
In short, yes. As with the other types of corporations, most states require nonprofit corporations to hold meetings of the directors and voting members, if any. Check your particular state’s statutes as well as your nonprofit bylaws for other meeting requirements. On the other hand, non-corporate business entities, such as sole proprietorships, part...
What is an LLC?
Forming a limited liability company (LLC) has many advantages. An LLC is not a partnership or a corporation but rather an entity that displays features common to both business types. It contains a deeper level of personal asset protection than the sole proprietorship and provides for simplified tax accounting. An LLC's owners are referred to as "mem...
Should I form a nonprofit or a for-profit corporation?
Often, the choice between entity types is relatively straightforward. Organizations seeking to provide charitable, educational, religious, literary, or scientific services to their communities typically need to obtain nonprofit status in order to become eligible to receive funds from government and private foundations in the form of grants and donat...
How does a nonprofit qualify for grants and tax-deductible donations?
Nonprofits that qualify under section 501(c)(3) of the IRC become exempt from paying federal income taxes. This qualification is also necessary to receive tax-deductible donations and many grants. Although donations received prior to the nonprofit qualifying for tax-exempt status are not tax deductible, they become retroactively deductible once the...