A non-profit organization or corporation is a group organized for specific purposes other than profit generation and it does not disburse any part of the organization’s earning to its individual members, board of directors or offices. It can be a fulfilling experience to start a non-profit organization. It is an inspiring way to give back to the community and help those who are in need. That being said, before deciding to move forward in starting a non-profit organization, it is important to know and understand all the steps that are involve in the process. Trying to start a non-profit requires a lot, so it would be best to make sure that it is the right decision before starting. A lot of non-profitfails, and research shows that almost half of these non-profits barely survived for five (5) years. It requires a lot of work, commitment and dedication to set up a nonprofit.
It would generally take up a lot of time to start a nonprofit.The entire process is complex and complicated; while a person can set up a nonprofit on their own, it would be best and worth it to consult a lawyer that is knowledgeable and with working experience with nonprofits to address issues regarding the matter. It is also worthy to note that when hiring a lawyer, it is best to get someone that resides or has an office in the same place as with the person trying to start the nonprofit organization. Take for instance, it would be recommended to hire a San Diego nonprofit attorney if the one trying to put up a nonprofit organization resides in San Diego, CA.
Here are the top reasons why one should consult with an attorney when you have a nonprofit organization:
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Nonprofit Start-up
Consulting a lawyer for guidance during the start-up of the nonprofit is a necessity. The type of legal entity that one seeks to create or whether there is a tax-exemption from the state depends on the organization to be created. Moreover, there are lots of forms to file or those attachments that are required such as the organization’s bylaws and budgets.
Filing
As mentioned above, there are heaps of forms or requirements that should be submitted and filed. If the nonprofit lapses on the reporting or filing of these requirements, the organization would be put at risk. The organization might be dissolved involuntarily which would be an inevitable result of the failure of the reporting. A lawyer’s guidance will help determine the best course of action to get the nonprofit organization back on course.
Document Drafting
Lawyers would be a great help in terms of drafting documents that nonprofit organization, or even entities that are tax-exempt, needs to have. These incudes the articles of incorporation, bylaws of the nonprofit, policies in conflict of interest and responsibilities of the board of directors.
Contracts and Leases
Before signing, it would be best that an attorney would review any documents in relation with a contract or a lease. This would ensure that the organization’s obligations are understood. Correspondingly, an attorney may facilitate in establishing processes to help guide the organization in the review of leases and contracts.
Employment
A lawyer can aid in interpreting employment laws – it can be daunting, in consort with all other matters like when should a contractual worker be considered an employee or what are the rules and regulation that should be incorporated in the employee handbook.
Administration Issues
A lawyer can help outline the structure, different roles, duties and responsibilities, and training of the board. They can also help in explaining the board of directors’ constitutional and fiduciary responsibilities and offer strategic planning, including insurance, job policies and business procedures advice.
Because the board of directors are generally the ones who govern nonprofit corporations or organizations, serious board conflicts are inevitable. To help with this matter, an attorney can outline the bylaws as to whether the board should be elected to office by members, if it is going to be self-perpetuating or appointed by an external body.
Risk Evaluation
A lawyer can certainly aid the organization to immediately identify, effectively prevent, significantly reduce and assess risks. Even though most nonprofit organizations have already contracted liability coverage, an attorney can guide in making policies and practices that can help prevent and easily manage risks even before they turn into a nonprofit crisis.
Merger and Reorganization
It is advised to consult with an attorney when there is reorganizing of the nonprofit corporation – this includes mergers with all the other nonprofits, buyouts of certain nonprofits, dissolution of a nonprofit corporation, and reclassification of foundations or public charitable organizations.
Tax Exemptions
Seeking professional advice from an attorney may be beneficial when the nonprofit will try for tax exemption, whether be it be the state where they are operating or from the IRS. In cases where the tax-exempt status had been granted, recommendations from lawyers who are knowledgeable about this matter can help resolve possible problems such as business earnings which are unrelated, complying with organizational standards and regulations in relation to nonprofit organizations and learning how to deal with immediate revocation.
Trademarks, Copyright, Patents
Expert advice from an attorney can be critical in order to determine what are the rights of intellectual property a nonprofit organization may need to protect. There might be a need for trademarks, copyright or patent – the attorney can aid through any relevant and important process of application.
Lawsuit Proceedings
If there is already a lawsuit involved with the nonprofit organization, it would be best to seek legal advice from a lawyer. Moreover, if the organization is threatened with a lawsuit proceeding, it is vital to proceed and hire an experienced lawyer within the nonprofit area of operation – take for instance, hiring a San Diego nonprofit attorney if the base area of operation is within California. It is not like every threat will result for the nonprofit organization becoming a party to a lawsuit; but addressing threats and discussing the appropriate steps with an attorney are advised.
