Non-Profit Corporations and Charitable Trusts

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Business Law

We work with non-profit companies of all sizes and stages of development, from helping individuals that merely have an idea for a charitable cause to providing complex legal services for well-established non-profit companies seeking to complete state-by-state charitable solicitation registrations. Our well-rounded and diversified experience helping non-profits allows us to tailor the scope of our legal representation to fit your organization's budget and legal needs.

Just Getting Started

If you are just beginning the process of establishing a non-profit company, let us advise you on the proper type of business entity for your venture. In your initial business consultation session, we will discuss your non-profit's specific needs and charitable objectives, as well as your options for obtaining tax-exempt status under section 501(c)(3) of the Internal Revenue Code or other provisions of the Internal Revenue Code. We can assist you by forming a corporation or limited liability company in Virginia, Maryland, the District of Columbia or another jurisdiction. For our non-profit business law services, we offer fixed rate packages, so that you know ahead of time your exact legal fees. In addition, we can provide you with legal guidance in order to help ensure that you avoid some of the common pitfalls associated with starting a non-profit company.

After Incorporating

If you have already established a corporation or limited liability company for your non-profit, then we can act as your company's general counsel by providing regular advice on the issues that arise with respect to your non-profit, including contract review and preparation, managing employment related issues and negotiating commercial real estate leases. In addition, if your non-profit has grown and your annual gross receipts are now greater than five thousand dollars ($5,000), we can assist you with the process of applying to the IRS using Form 1023 in order to be recognized as tax exempt under section 501(c)(3) of the Internal Revenue Code or other provisions of the Internal Revenue Code, including obtaining an Employer Identification Number (“EIN”). Every non-profit company recognized as tax exempt under section 501(c)(3) must have an EIN, even if the company operates without any employees.

As of June 2014, the IRS released Form 1023-EZ, a three page streamlined application for tax exemption. This is a dramatic reduction compared to Form 1023, which is a twenty-six page application. We can help you through the process of applying to the IRS using Form 1023-EZ for tax exemption, as long as your non-profit meets the following requirements:

  • Not more than $50,000 of projected annual gross receipts for the next three (3) years;
  • Annual gross receipts have not been greater than $50,000 in the past three (3) years;
  • Total assets are equal to or less than $250,000; and
  • Not a school, church or other restricted organization.

In addition, in order to file for tax exemption using Form 1023-EZ, a corporation must be incorporated pursuant to the non-profit or non-stock laws of the state in which it incorporates.

If you do have employees, then we can also assist you by drafting employment agreements and an employee handbook, which clearly communicates guidelines for employee behavior and responsibilities. Additionally, we can assist your non-profit in maintaining its tax-exempt status by advising on restrictions applicable to tax-exempt non-profits.

Charitable Solicitation Registrations and Fundraising

Non-profit companies that are considering soliciting fundraising donations should be aware that most states have their own diversified registration requirements, which must be satisfied prior to commencing solicitations in that state. Individual localities within a state may also require separate registration in some cases. The increase in online solicitation and donations may require today's non-profit companies to register in more states than they might otherwise have had to, possibly even every state that requires registration. These registration requirements include, among other things, initially providing identifying information about the non-profit and its operations, as well as an ongoing obligation to provide financial information about the non-profit thereafter on an annual basis. Registration issues can be especially prevalent for any non-profit company that is considering accepting online donations, as this can trigger nation-wide registration requirements. Failure to register with a particular state before soliciting donations in such state is a violation of the law and could subject your organization (and in some circumstances, even its officers and/or directors) to whatever sanctions (e.g., a substantial fine) exist under such state's law. Therefore, compliance with these registration laws is vital.

First, we can help to guide you in determining in which states your non-profit will need to register, based upon such factors as the intended methods of solicitation, the approximate anticipated amount of donations that your non-profit will receive and whether professional fundraisers will be used. Then, we can help you to prepare a Unified Registration Statement (“URS”). The URS represents an effort to consolidate the information requirements of all states requiring registration. Although the URS somewhat simplifies the registration process, each state's requirements with respect to the URS are different and many states require supplemental forms to be filed with the URS. Finally, we can assist you by tailoring the URS to each state's specific requirements and completing any additional required forms.

In addition, we can help you to ensure that your ongoing and planned fundraising activities continue to meet state fundraising laws, as failure to comply with these laws can cause a non-profit to be subject to fines and the non-complying entity may even lose its ability to solicit charitable contributions in that state.

If you would like to discuss options for your non-profit, please contact us.

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