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Doing Business 2. 0—Starting and Operating a Nonprofit in DC George E

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1 Doing Business 2. 0—Starting and Operating a Nonprofit in DC George E
Doing Business 2.0—Starting and Operating a Nonprofit in DC George E. Constantine, III, Esq., Partner Venable, LLP, Washington, DC (202)

2 George E. Constantine, III, Esq.
Counsel to tax-exempt charities, trade associations, professional societies, labor organizations Former Staff Counsel for the American Society of Association Executives Concentrates practice on tax-exemption matters, contracts, election law, corporate governance and other issues affecting tax-exempt, nonprofit corporations.

3 Forming a Nonprofit—Preliminary Steps
Establish mission and goals Survey the landscape—are there other organizations pursuing similar mission and goals? Assess likelihood of funding, dedicated volunteer resources, etc.

4 Forming a Nonprofit—Legal Requirements
Articles of Incorporation Name (doesn’t need an “Inc.” or similar signifier in DC) Purposes Name and street address of incorporators Members or not? Classes? List of initial directors (at least 3, optional to list them) Designated body?

5 Forming a Nonprofit—Legal Requirements
Articles of Incorporation (continued) Registered agent in DC 501(c)(3) dissolution and purposes language Indemnifying directors and limitations of liability

6 Forming a Nonprofit—Legal Requirements
File Articles with DCRA (one incorporator, notary not needed) Draft Bylaws More detailed than Articles of Incorporation Should include discussion of Board of Directors, Committees (if applicable), Members (if applicable), indemnification, etc. Organizational resolutions—approving Bylaws, authorizing establishment of bank accounts, naming corporate officers (at least a President, Secretary and Treasurer), approving policies

7 Forming a Nonprofit—Legal Requirements
Tax Forms Federal Exemption application—Form 1023 for 501(c)(3); Form 1024 for most other types of exempt organizations DC Exemption—Form 164 501(c)(3) organizations can obtain exemption recognition for franchise (income) tax, sales and use tax, personal property tax Applicable as of date of IRS recognition

8 Charitable Solicitation
Charitable Solicitation License Occupancy certification Good standing as a corporation Tax registration FR500 Clean Hands certification Basic Business License Application Articles of Incorporation, Bylaws, Uniform Registration Statement, other documents

9 Other Considerations Operating, fundraising in other states?
Trademark registration URL reservation Lobbying registration Affiliated entities? Insurance coverage (note minimum levels of $200K for individual claim and $500K for total claims in order to benefit from volunteer immunity provisions)

10 Basics on Nonprofit Corporation Legal Issues
Hierarchy of Authority State Nonprofit Corporation Law (statute and common law) Articles of Incorporation Bylaws Board Policies and Procedures Unwritten Common Practices

11 Basics on Nonprofit Corporation Legal Issues
Governance Structure Board of directors Executive committee Other committees of the board (nominating, finance) Members Other committees Staff

12 Corporate Governance Fiduciary Duties Care Loyalty Obedience

13 501(C)(3) Issues Public benefit requirement—charitable, educational, advancement of health, etc. No substantial private benefit No private inurement Political activities Lobbying UBIT

14 501(C)(3) Issues Form 990 Publicly available information
Once a year (May 15 deadline for calendar year filers) 990-N—even very small organizations have to do it Automatic revocation Publicly available information

15 Questions?

16 Contact Information George E. Constantine, III Partner Venable LLP 575 7th Street, NW Washington, DC Phone: Fax:

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