How to Create a Non-Profit Startup and the Need for a Lawyer
Provided by HG.org
Starting any organization it is important to know what steps to follow, what professionals are involved and the need to hire a lawyer to ensure transactions are legal and legitimate for the entity. The steps to create a non-profit startup are often similar to any other entity, but the owner of the organizations may need some additional research and data to keep it going.
The reason to create a non-profit may depend on the circumstances of the individual or the environment. If the person has a cause that he or she believes in, he or she may start a new corporation or entity that is not to create a revenue stream.
The issues are difficult, and it is often complicated to ensure that the startup survives beyond creation. The owner of the corporation or organization then must decide if he or she is committed to ensuring the success of the non-profit, and the time and energy to do so may consume him or her. Discovering and communicating with sponsors or investors is important, and these relationships may be what make or ruin the non-profit startup.
To create a non-profit, the person or group needs to ensure the proper paperwork has been provided to the Internal Revenue Service after 60 days of establishment of the entity. The organization must be classified depending on what it provides to the community such as a charitable service, social welfare or religious or spiritual services similar to a church. These aims are often put on paper and legitimized by a lawyer hired to assist with the creation of the non-profit. When the IRS documentation is approved, then the tax exempt status is awarded and the organization may proceed legally with the goals.
What Processes to Complete
There are checklists available online for those seeking to create a non-profit startup. The various procedures and methods that may be utilized should be researched and fully understood for any entity that is established. If the plan is to incorporate the non-profit, this may attract charitable profits raised by entities unrelated to how the organization is run or the stated purpose. The first step is to create the name. This is vital, and it may create a sense of bonding with the public. With the right brand, any entity may be remembered and known by consumers without needing reminders. The state where the non-profit is created may require an incorporated, limited or corporation added to the name.
The name and purpose of the organization should be provided to the public and possible sources of income. Then, the name may be registered in the state or throughout the country. This is similar to trademarks where the name is registered for products or services sold to the customer or client. However, this registration provides a way for communication and contact with others that are seeking to join or add to the organization. This also opens channels for sources of sponsorship and funding. When one of the goals of the entity is to enrich the community, drives and outreach programs should start immediately and incorporate the neighborhood.
The Need for a Lawyer in a Startup Non-Profit
When creating an entity, a lawyer is needed for a variety of reasons, and he or she is there to prevent legal problems from arising. Through processes, performance and service for a client, the legal representative is able to ensure documents are valid, the appropriate officials are communicated with and the methods for creating the startup are adhered to correctly. With a non-profit, establishing the entity revolve around the exempt tax status and filling out forms with the IRS. If any of these processes are not correctly performed or completed, the non-profit may be dissolved. The type of non-profit should be established with the form filled in and returned to the IRS after 60 days of the startup creation.
The lawyer involved in these startups then must examine the bylaws, internal paperwork and the goals of the non-profit. These must align with the type of organization that has been filed for with the IRS in documentation. The structure and internal procedures used are closely related to a business, and the lawyer may need to point the owner or group to someone for advice in these matters. Then, the startup non-profit may succeed and stay around long enough to become remembered by the public. The lawyer then is able to remain in service to the owner.
Read more on this legal issueDifferences between 501 c(3) and 501 c(4) Non-Profit Organizations
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.