What are the steps to form a nonprofit organization in California and what legal requirements must be in place to obtain tax-exempt status?

To form a nonprofit organization in California, follow these steps:

1. Choose a name for your organization that complies with California law and is not already in use by a registered organization. You can conduct a name search on the California Secretary of State's website to check availability.
2. Draft and file the Articles of Incorporation with the California Secretary of State to create your organization. This document outlines the purpose of your nonprofit, the name and address of the registered agent, and information about the initial board of directors. You will also need to include a statement that your organization is formed for charitable, educational, or other qualifying purposes.
3. Obtain a Federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes. This number is necessary to open a bank account, apply for grants, and conduct other financial transactions.
4. Draft and adopt bylaws for your nonprofit organization. These bylaws should govern your organization's internal operations, including the duties and responsibilities of the officers and board members.
5. File the Statement of Information with the California Secretary of State. This form updates the state's records with any changes to the organization's name, address, or officers.

To obtain tax-exempt status for your nonprofit, you must apply to the IRS by filing Form 1023. The application process requires you to provide detailed information about your organization, including its purpose, activities, structure, and finances. The IRS will review your application and make a determination about your eligibility for tax-exempt status.

To qualify for tax-exempt status as a charitable organization, your nonprofit must meet the following requirements:

1. Be organized and operated exclusively for charitable, religious, scientific, literary, or educational purposes.
2. Not engage in activities that benefit private individuals, except as an incidental part of its charitable activities.
3. Not participate in political campaigns or lobbying activities.
4. Be organized as a corporation, trust, or unincorporated association.
5. Comply with all federal and state laws regarding nonprofit organizations.

It is important to note that obtaining tax-exempt status is a complex process and may require additional legal guidance. It is recommended that you consult with an attorney or a tax professional to ensure compliance with all legal requirements.