Legal Requirements for Starting a Non-Profit Organization in California

In California, starting a non-profit organization requires compliance with both state and federal laws. Here are the legal requirements for starting a non-profit organization in California:

1. Choose a Name and Legal Structure: The first step is to choose a name for the non-profit organization that is not already in use. Also, decide on the legal structure of the organization, as it will affect the requirements for obtaining tax-exempt status.
2. Draft Articles of Incorporation: The non-profit organization should prepare and file Articles of Incorporation with the California Secretary of State. These documents should include the non-profit's name, purpose, structure, and other legal specifications.
3. Obtain Tax Identification Number: Obtain a tax identification number by registering with the IRS or filing Form SS-4.
4. Apply for Tax-Exempt Status: File an application for federal tax-exempt status (IRS Form 1023) or state exemption (Form 3500) to avoid paying taxes on the organization's income.
5. Register with the Attorney General: File a charitable trust registration form with the Attorney General’s Registry of Charitable Trusts within 30 days of receiving more than $25,000 annually.
6. Comply with Additional Requirements: There are additional requirements for non-profit organizations in California, including annual filing requirements, conflicts of interest policies, and compliance with fundraising regulations.
7. Create Bylaws: Non-profit organizations must also create bylaws that outline the rules of operation and management of the organization.

Exceptions and Limitations:

Some non-profit organizations, such as churches, have automatic tax-exempt status and may not need to file for tax exemption. Additionally, non-profits with revenue less than $50,000 may file Form 1023-EZ to expedite the application process. Failure to follow these legal requirements may result in legal penalties, fines, and revocation of tax-exempt status.

Further Action:

If there are any questions or confusion regarding the legal requirements for starting a non-profit organization in California, it is recommended to seek legal advice from an experienced attorney familiar with California state and federal law.