Legal Question in Business Law in California

A ''need-to-know'' on non-profit organization legalities.

1) What first steps do I need to take, before I can run one legally.(paperwork, registration/licenses, fees etc.

2)Are non-profits beneficial to the people who run it as well or just to the children and families who are given services from one?

3)What resources/contacts would be the most usefull to answer all my questions simply and to the point, about all the ''dos and don's'' of running a non-profit organization?


Asked on 9/15/03, 1:47 am

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: A ''need-to-know'' on non-profit organization legalities.

First, creating a non-profit entity (normally, a corporation) is a separate issue from running one once it's set up.

Creating a non-profit corporation is a two-step process, and you'll need legal assistance for both parts: first, the corporation is formed; then, it applies to the IRS for tax-exempt status.

People who manage non-profit organizations frequently receive good salaries, but heading a non-profit is not a license to steal. By definition, a non-profit organization does not make profits which can be distributed to shareholders or other insiders.

Anyone intending to start and run a non-profit organization should obtain legal assistance from an attorney with experience in that area. It is not simple, especially the IRS application.

A person starting a non-profit will also need advice on the legal and ehtical issues connected with soliciting and accepting donations.

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Answered on 9/16/03, 4:04 am


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