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Non-Profit Corporations

Quite simply, people generally underestimate the time, effort, and money that it takes to begin a non-profit agency or foundation. Many folks like the idea, in theory, of starting their own Non-Profit organization - however, when they come to understand the reality of the time, effort, and money it takes, they suddenly may "lose interest".

This is not all bad. That means the ones who generally don't lose interest after hearing this, are truly interested, and truly want to set up a Non-Profit. Perhaps it is to make a difference in the lives of others. Perhaps it is to help those who need it. Perhaps it is not charitable at all, but is for a simple social club or neighborhood association.

In any respect, we have helped many clients with their non-profit concerns, and we would be happy to help you as well. Here are just a few things to consider before contacting us, however:

  1. IS YOUR PURPOSE CHARITABLE? If you are setting up a "charitable" non-profit agency, for the greater good of society, you will want to make sure that a contributor to your non-profit gets a tax deduction for their contribution. However, to accomplish this, you will have to apply to the IRS for this "charitable designation.
  2. IRS SCRUTINY. Make no mistake, if you pursue a "charitable" designation from the IRS, you seeking the ability to take donations, and not pay any income tax on these contributions. Therefore, the IRS takes this very seriously, and applies much scrutiny on such matters. You will have to fill out a long and detailed application, and will need the assistance of a Certified Public Accountant in doing so.
  3. CPA & ATTORNEY. If you are setting up a "charitable" non-profit, you will surely need a qualified CPA, in addition to a qualified attorney. As your law firm, we will handle the filing of the Missouri Non-Profit Corporation, making By-Laws, setting up your Board of Directors, writing meeting minutes, and handling many other legal matters. We DO NOT typically assist in any tax related issues, so you will surely need a CPA who knows about non-profit taxation, and attaining the charitable designation.
  4. FILING FEES. "Charitable" non-profit corporations have filing fees. The filing fee for the "legal side" is a mere $25. However, the application to get a "charitable" designation with the IRS can range typically anywhere from $300 to $1,000. These are just filing fees; do not forget to account for attorney fees and CPA fees.
  5. NO OWNERS OR SHAREHOLDERS. Please remember that non-profits are typically formed for the greater good of society, or to serve some larger purpose. They are not formed to make money. Therefore, a non-profit CANNOT BE OWNED. There are NO OWNERS or SHAREHOLDERS in a non-profit corporation. The non-profit corporation may own assets; however, if the non-profit ever shuts down, any assets or monies held by the entity will be typically be distributed to another non-profit.
  6. BOARD OF DIRECTORS. You will need at least (3) people to serve on a board of directors for the non-profit corporation. Make no mistake, this means that Bylaws that are not properly drafted could lead to problems down the line, such as being voted out of the very non-profit you established.
  7. MEMBERS. One of the most important considerations for non-profits is whether the entity will have "members". Is this non-profit a group that people will join? Usually having members means you and your attorney will have to spend extra time considering such questions as:
    1. Who is eligible to apply to be a Member?
    2. How does a prospective Member apply?
    3. How are applicants scrutinized or approved?
    4. Do the members pay dues?
    5. How much will dues be?
    6. What is the term of Membership? One year, or longer?
    7. What must a Member do to stay in good standing?
    8. How do you get rid of Members whom are not in good standing?
    9. Will there be different classes of Members?
    10. If so, how will the classes be differentiated?
    11. What powers will Members have?
    12. What powers will Members not have?
    13. Can Members vote?
    14. How much power will Members have collectively, compared to the Board of Directors or Officers?

So as you can see, setting up a non-profit association can be take a lot of time, thought, and funds. The Piatchek Law Firm, LLC can assist you with your non-profit considerations, whether large or small. Contact us anytime to set an appointment to discuss your non-profit today.