Not for Profit Laws
What is a not for profit organization?A not for profit organization is one which is formed for reasons other than making a profit in a business. There are a lot of things that need to be looked into while setting up a not for profit company like tax exemption, not for profit laws and rules, etc. Not having enough information about not for profit organizations can leave you in a lurch. Below are the top questions about not for profit companies that are answered Experts.
How is a Not for Profit Organization Formed?In order to form a not for profit company, an individual needs to contact the state’s corporate filing division. They normally send sample articles of incorporation, the respective state’s nonprofit corporation laws, a fee schedule and forms for checking the availability of the organization’s proposed business name. Once that is done, the individual needs to choose a business name. All the paperwork needs to be completed and a filing fee needs to be paid. The individual also needs to apply for federal and state tax exemptions. Once all this is done, the individual may create corporate bylaws. These will set the rules for the nonprofit company. The individual also needs to obtain all licenses and permits that may be required for the organization. After this, the individual may appoint the initial directors and hold the first meeting with the board of directors.
What consequences will a Not for Profit Corporation face for Violating its Bylaws?If a not for profit corporation violates bylaws and takes important decisions without informing the board members, it may not affect the nonprofit status of the company. However, the board may treat these decisions as null and void.
Can a Customer of a Not for Profit Organization be on the Board of Directors?Customers of not for profit companies may be given a position on the board of directors. However, in most cases, they may not be able to vote and use their status in the company to obtain special benefits or better deals.
Should a Not for Profit Organization have Zero Balance at the End of the Year?A not for profit organization need not have zero balance at the end of the year. On the other hand, it may have funds that will help with its ongoing operations at the end of the year.
What is the Process to add a New Officer to a Not for Profit Organization?A quorum vote of the directors may be required if a new officer is being added to the not for profit company or if an old employee’s status is being changed to that of an officer. If the organization has bylaws, it may also need an amendment of those bylaws to add the new officer. If the bylaws cannot be amended, then during a full quorum meeting, the members may first make a motion to amend the bylaws before adding the new position. A notice may be sent to the members about the new position. The members attend the board meeting and pass the motion to add the new officer. If the maximum number of votes is in favor of the new position, then it may be added to the organization.
Can a Not for Profit Alumni Publication use the School’s Name, Logo and Mascot?In order to use the school’s name, logo and mascot for the not for profit alumni publication, the individual will need to take a written permission from the school. If it is used without permission, the school may file a lawsuit to stop the publication. However, the individual may use the school’s color scheme without permission.
Once you have the all the information that is needed about not for profit organizations, it becomes easy for you to go ahead and set the organization. Ask Experts to know more about not for profit organizations, for profit organizations and other business related issues.