Legal Question in Business Law in Illinois

A non-profit does not have to be incorporated. A non-profit that does not incorporate is known as an unincorporated association. Unincorporated associations may even apply for 501(c)(3) status with the IRS and accept tax-deductible contributions.

However, you should be careful because the officers, directors and possibly even members of the unincorporated association may have personal liability exposure. Because incorporation of a non-profit is quick, easy and relatively inexpensive, any non-profit should seriously consider incorporating.

If the organization is going to function in more than one state, then it will generally need to file to be qualified as foreign non-profit corporation in each additional state and keep its registration current as long as it has a significant presence in that state.

Be careful, though, because states do have a variety of laws that regulate non-profits, particularly non-profits who are soliciting charitable funds in the state. Registering to do business in a state is often just one step in the required compliance.