Non-Profit Corporations

Non Profit CreationI am pleased to have participated in the formation of many non-profit corporations in Massachusetts, and offer this service at an affordable rate. I highly recommend that you bring an attorney and an accountant into the initial creation of your non-profit, so that it is done properly and so that you will have professional advisors to assist you as you move forward in the process.

501(c)(3)

In many ways it is more difficult to set up a non-profit corporation than it is to set up a for-profit corporation.  Non-profit corporations seeking tax-exempt status from the IRS pursuant to 501 (c)(3) are limited to corporations established for charitable, educational, scientific, literary, public safety, religious purposes, fostering amateur sports, or preventing cruelty towards children and animals.  No part of the organization’s income may be distributed to its directors, officers, and members.

Choosing a name

Choosing a name can be exciting and challenging, as you will want it to reflect well on the corporation.  You need to be flexible, as many names have already been taken.  You can find out about name availability by going to the Massachusetts Secretary of State’s web site.

Members or not

You will decide if you want your corporation to include members or not.  Typically you would not want members if you are a small non-profit, as members are often in conflict with each other or with the board of directors and officers.  You want to avoid internal fights within your non-profit which occur in large part because a non-profit is not seeking profits, and can get derailed by rivalries for power and recognition.

Officers and directors

Besides people who will work hard, a non-profit needs people who can raise money.  You should carefully select your officers and directors before going forward with incorporating, and agree on the purpose of the corporation, terms of office, duties, and problem resolution.  Once you have a committed group of people, you will work with your attorney to set up your corporation by filing articles of organization with the Secretary of the Commonwealth, adopting by-laws, and acquiring a tax identification number.

You may already be operating as a loose organization, or you may be just starting.  Oftentimes a group of people will want to meet with and work with the attorney, and participate in all decisions.  If I become involved with setting up a non-profit, I ask that you assign one and no more than two people to work with me so that I can focus on the task at hand, and represent you at an affordable rate.  It will be your job to update others, acquire input, and work with your group to assign tasks.  Before meeting with me, do your best to complete the articles of organization form from the Secretary of State.

Tax exempt 501(c)(3) status

The hardest part, however is yet to come, and that is in acquiring your tax exempt 501(c)(3) tax exempt status.  You will have to work with an accountant to complete that task, as it is complicated and time-consuming, and requires a strong understanding of your corporation’s financials and activities.  You will need good bookkeeping and budget-planning skills.  You will also have to register and file annual reports with the Attorney General of Massachusetts.

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