Although the following does not necessarily apply to religious organizations, it does provide the simplified steps to form a nonprofit organization in California. What follows is a general outline of the process:
Define your mission and purpose: Clearly articulate the mission and purpose of your nonprofit. Determine the specific cause or community need you aim to address.
Choose a name: Select a unique name for your nonprofit that complies with California naming requirements. Ensure the name is distinguishable from other existing entities.
Draft your bylaws: Prepare bylaws that outline the internal governance and operational rules of your organization. Include provisions on board structure, decision-making processes, membership (if applicable), and other important policies.
Recruit board members: Form a board of directors comprising individuals who are committed to your mission and can provide guidance and oversight for your organization. Ensure compliance with California’s requirements for the minimum number of directors.
File articles of incorporation: Prepare and file the Articles of Incorporation with the California Secretary of State. The articles should include essential information such as the name of the organization, its purpose, the initial board members, and the registered agent.
Obtain an Employer Identification Number (EIN): Apply for an EIN from the Internal Revenue Service (IRS). This unique identification number is necessary for tax purposes, opening bank accounts, and hiring employees (if applicable).
Apply for tax-exempt status: If you want your nonprofit to be recognized as tax-exempt by the IRS, you’ll need to complete and submit Form 1023 or Form 1023-EZ. This process establishes your organization’s eligibility for federal tax benefits.
Register with the California Attorney General’s office: File necessary registrations and disclosures with the California Attorney General’s Registry of Charitable Trusts. This step ensures compliance with state laws governing charitable organizations.
Comply with other state requirements: California has additional requirements for nonprofits, such as obtaining necessary licenses or permits, registering for state taxes (e.g., sales tax), and complying with employment laws if you have paid staff.
Develop a fundraising plan: Create a strategy for fundraising and securing financial support to sustain your nonprofit’s operations. Familiarize yourself with state regulations concerning charitable solicitations.
Maintain ongoing compliance: Fulfill ongoing compliance obligations, such as filing annual reports, maintaining proper record-keeping, and adhering to fundraising and financial transparency requirements.
It’s crucial to consult with an attorney or a qualified professional experienced in nonprofit law to ensure compliance with all applicable laws and regulations throughout the formation process. They can provide personalized guidance based on your organization’s specific needs and objectives.
Please see our other related articles
Choosing the Right Business Entity and Entity Formation
Churches and Unrelated Business Income Tax
Corporations in Suspension
Church Officer and Director Liability
Disclaimer: Every situation is different and particular facts may vary thereby changing or altering a possible course of action or conclusion. The information contained herein is intended to be general in nature as laws vary between federal, state, counties, and municipalities and therefore may not apply to any given matter. This information is not intended to be legal advice or relied upon as a legal opinion, course of action, accounting, tax, or other professional services. You should consult the proper legal or professional advisor knowledgeable in the area that pertains to your particular situation.
