Robertson & Gable, LLC.
Robertson & Gable, LLC.
Robertson & Gable, LLC.
Robertson & Gable, LLC.
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General-All Business Entities
 
Choice of Entity
 
Corporations
 
LLCs
 
Nonprofits

Questions and Answers
Nonprofit Corporations

What kinds of nonprofit corporations do you offer?
 
What is a private foundation as compared to a public charity?
 
What is a nonprofit corporation "member?"
 
Do I need IRS approval?
 
Do I have to do anything special to solicit donations?
 
Can I amend my corporation to become a nonprofit?
 
What is a good resource to learn more about nonprofit corporations?
 
 

Answers

What kinds of nonprofit corporations do you offer?  return to top

We offer several standard nonprofit corporations based upon the corporate purpose and method of choosing the Board of Directors. Our nonprofit corporations are identified by the IRS Code Section authorizing the various types of nonprofit corporations based on the purpose of the organization.

501(c)3
Charitable, Religious, or Educational Organization

 
501(c)4
Civic League, Social Welfare, or Community Association
Homeowners Association*
Condominium Association*

 
501(c)6
Business League*

 
501(c)7
Social or Recreational Club*

 
For each of the above, there are two options on how the Board of Directors are chosen. If the nonprofit corporation has "members," the members elect the Board of Directors. If the nonprofit corporation does not have "members," an initial Board of Directors is named, and upon a vacancy, the remaining directors choose the new director.

* Some nonprofit corporations inherently must have members that elect the Board of Directors.

What is a private foundation as compared to a public charity?  return to top

Charitable 501(c)3 nonprofit corporations are further classified as a "public charity" or a "private foundation." A public charity receives more that one third (1/3) of its funding from the general public. Otherwise, it is a private foundation and subject to more rules and regulations. Please advise us when forming a 501(c)3 corporation how you will be classified. We include additional provisions in the Articles of Incorporation for private foundations.

What is the significance of a "member" of a Nonprofit Corporation?  return to top

A nonprofit corporation may or may not have members. The sole significance of a member under Georgia nonprofit corporation law is that members have the right to elect the Board of Directors. The Board of Directors then run the nonprofit corporation through the officers elected by the Board of Directors. If a nonprofit corporation has no members and a vacancy in the Board of Directors occurs, the remaining directors select the replacement director. In other words, all the power and authority to run a nonprofit corporation vests in the Board of Directors, with the members (if there are any) being able to elect new directors.

Do I have to be approved by the IRS as a tax-exempt Nonprofit Corporation?  return to top

Generally, yes. An application generally must be filed with the Internal Revenue Service in order to obtain tax exempt status. We do not provide this service. The application for tax exempt status tends to be a lengthy and confusing document. We advise you to contact your CPA or other tax advisor for assistance in filing the appropriate documents. Your nonprofit corporation may not need to file an extensive application if it is a subordinate organization (a chapter, local, post, or unit of a central organization). In many instances, the central organization has been issued a "group exemption letter" which covers subordinate organizations. Contact your central organization if you think this applies to your corporation. For more information, download Publication 557 and either Form 1023 or 1024 (depending on type of nonprofit) from the IRS web site, http://www.irs.gov.

Do I have to do anything special to solicit donations for my nonprofit?  return to top

Generally, yes. If your nonprofit intends to solicit contributions from the public, you are required to register your charitable organization with the Georgia Secretary of State, unless you are exempt. Churches and religious agencies supervised or controlled by a religious organization are automatically exempt. There are other exemptions. Annual renewal is also required. To obtain more information, contact the Georgia Secretary of State at (404) 656-3920 and request a Charitable Organization Information Release and a Charitable Organization Registration Form (Form C100). This form can be downloaded from the Securities and Business Regulations Division subsection of the Secretary of State web site.

I have a profit Corporation. If I become a Nonprofit Corporation, I will be eligible for federal grants. Can I simply amend my corporation to become a Nonprofit Corporation?  return to top

Yes, but there is a lot more to it than meets the eye. This question arises often in the daycare setting. Sometimes profit day care centers choose to convert to nonprofit status in an attempt to obtain federal grant money. The IRS has many rules to make sure profit corporations do not disguise themselves as nonprofit corporations. There are significant additional restrictions and reporting requirements imposed on nonprofit corporations. The first step for someone considering this change is to contact a CPA knowledgeable in nonprofit corporations to learn what will be required by the IRS. If you then choose to proceed, the better approach is to form a new nonprofit corporation with a name that is similar to but different enough to distinguish it from the existing profit corporation.

Nonprofit Corporations are very confusing to me. What is a good resource to guide me?  return to top

Georgia is lucky to have the Georgia Center For Nonprofits based in Atlanta. For more information on their services visit their web site at http://www.gcn.org/.

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