If you run a business that operates to benefit community members or another designated group of individuals, you may be eligible to form a nonprofit. Forming a nonprofit allows you to obtain tax exemption status and may come with additional benefits for your organization. Read on to learn more about how to form a nonprofit in California, and how A People's Choice can help.
California law uses the term “nonprofit corporation” as a company that doesn't distribute profits to its directors or officers the way a corporation does. It may earn income by engaging in business activities, and it may have paid employees. With this in mind, however, it is not a conventional business in which the owners get a share of the profits. Religious organizations, social clubs, and charities are all eligible for nonprofit corporation status in California. You don't need a lawyer to set up a nonprofit corporation, but you should have your documents prepared by a qualified professional. The best choice is to hire a registered legal document assistant to prepare your forms.
In 2014, the IRS launched the Form 1023-EZ Application process enabling nonprofits to self-certify their own 501(c)(3) status. The form created a streamline method for applying for 501(c)(3) tax exempt status and is accessible at www.pag.gov. Nonprofits who qualify no longer have to undergo an intense application process which takes months to complete. Read on to learn [...]