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What legal steps do I need to take if I want to start a non-profit organization in California?

Picture of Chris Battis By   ·  1 minute read

To start a non-profit organization in California, you will need to take the following legal steps:

  1. Choose a name: The name of your non-profit organization must be unique and not already in use. You can check if your preferred name is available by searching the California Secretary of State's business name database.

  2. Form a board of directors: A board of directors will oversee the management and direction of the non-profit organization. The minimum number of directors required is three, but it is recommended to have at least five.

  3. File Articles of Incorporation: The Articles of Incorporation is a document that creates the legal existence of the non-profit organization. It should include the organization's name, purpose, address, and the names and addresses of the initial board of directors. The Articles of Incorporation must be filed with the California Secretary of State's office.

  4. Obtain Federal Tax ID: The organization will need to obtain a Federal Tax Identification Number (also known as an Employer Identification Number) from the Internal Revenue Service (IRS).

  5. Apply for tax-exempt status: To become a tax-exempt organization, you must file Form 1023-EZ or Form 1023 with the IRS. This is a detailed application that requires information about the organization's activities, governance, finances, and more. The application fee for Form 1023-EZ is $275, while the fee for Form 1023 is $600. Note that some organizations may be eligible to file Form 1023-EZ, while others must file Form 1023.

  6. Register with the California Attorney General: Non-profit organizations in California must register with the Attorney General's Registry of Charitable Trusts within 30 days of receiving assets for the first time. This includes filing annual financial reports.

  7. Obtain necessary licenses and permits: Depending on the activities of the non-profit organization, it may be required to obtain certain licenses and permits at the federal, state, or local level. For example, if the organization is going to sell goods or services, it may need a sales tax permit from the California Department of Tax and Fee Administration.

It is important to note that this list of legal steps is not exhaustive and may vary depending on the specific circumstances of your non-profit organization. Additionally, there may be exceptions or limitations that apply to your organization. Consulting with a licensed attorney can help ensure that you are taking all necessary legal steps and complying with all applicable laws and regulations.