If you’re trying to find out how to form a nonprofit in California without spending a fortune on attorneys fees, A People’s Choice is here to help! Our services include assisting you with filing your nonprofit with the California Secretary of State and getting 501C3 exempt. Plus, as a legal document preparer, we ensure your legal paperwork is complete and accurate before filing.
An Overview of Nonprofits in California
Nonprofits are created for charitable purposes. Thus, under California State law, a nonprofit corporation must benefit the public, a designated group of individuals, or the membership of the nonprofit. Furthermore, the IRS classifies different kinds of nonprofit business structures into the following categories:
- Civic league, social welfare organization, or local employee association
- Trade or professional association
- Social or recreational club
- Fraternal society
- Veteran organization
Each category listed above has different tax implications. Luckily, the California Attorney General’s Guide for Charities is a great source of information for more specific guidelines for different categories of nonprofits.
How to Form a Nonprofit in California
In order to form a nonprofit corporation in California, you need to choose and reserve a corporate name and prepare and file Articles of Incorporation with the Secretary of State. First, you can check with the Secretary of State to determine if a proposed corporate name is available. Also, we recommend you reserve a corporate name (60 day period) to ensure you receive your desired business name.
Then, once you’ve designated a corporate name, you will need to file the Articles of Incorporation. More specifically, the Articles of Incorporation identify the organization’s name, purpose, agent for service of process, and any limitations on corporate powers. Upon filing the Articles of Incorporation, your corporation will be officially created!
Additionally, you will need to create bylaws, elect initial directors, take the initial board meeting minutes, and file the Statement of Information by Domestic Nonprofit Corporation within 90 days of filing the Articles of Incorporation. Also, if your organization receives any type of assets, you will need to register with the Attorney General’s Registry of Charitable Trusts. Luckily, A People’s Choice can help you prepare and file the necessary documents to form your nonprofit.
File for Federal & State Tax Exempt Status
Once you have established your nonprofit corporation, you will need to file documents with the IRS and California Franchise Tax Board to obtain tax exempt status. However, obtaining a tax exempt status under Internal Revenue Code Section 501(c)(3) can be tedious. In fact, the application consists of eleven parts and eight schedules. Plus, it usually takes the IRS three to four months to process the application.
Ultimately, once you receive a letter from the IRS designating your tax exempt status, you can file it with the Franchise Tax Board. Filing this letter will officially request affirmation of your nonprofit’s tax exemption. Upon approval, you can forgo filing the complicated state income tax exemption form.
Hire a Nonprofit Legal Document Preparer
At A People’s Choice, we have helped several charitable organizations obtain nonprofit tax exempt status. Plus, we provide affordable rates and can save you hundreds of dollars. Contact us to learn more about how we can help you form a nonprofit in California.