Legal Issues Archives - Nonprofit Corporations & Charitable Organizations

Newspaper Publication of Articles Eliminated for Maricopa & Pima Counties

Effective January 1, 2017, Arizona nonprofit corporation law was modified to eliminate the previous requirement that all new Arizona nonprofit corporations must publish their Articles of Incorporation in a newspaper approved by the Arizona Corporation Commission. That’s the good news. The bad news is that the publication requirement will continue for all Arizona nonprofit corporations that have a known place of business in a county other than Maricopa or Pima.

Richard Keyt2017-01-08T12:05:04-07:00Arizona Corporation Commission, Legal Issues, Start Up Issues|0 Comments

Executive Compensation – The Legal Issues

Nonprofit Law Blog: “Determining the appropriate amount of compensation to pay an executive is one of the most important decisions a board is asked to make. Board members must balance budgetary concerns with the need to find a qualified candidate. Traditionally, it was not uncommon for nonprofits to expect executives to work for significantly less than they might earn elsewhere because of their passion for the organization’s mission. However, that’s a poor business strategy to rely on for recruiting or retaining the right person for the most pivotal position to the organization’s success.”

Read the entire article on this very important topic.

On the Net2018-01-14T10:38:13-07:00Employment, Legal Issues|0 Comments

When an Exempt Organization Must Report Changes to the IRS

An exempt organization must report name, address and structural and operational changes to the IRS. If an organization files an annual return (such as a form 990 or 990-EZ), it must report the changes on its return. If the organization needs to report a change of name, see Change of Name- Exempt Organizations. If it needs to report a change of address, see Change of Address – Exempt Organizations. The EO Determinations Office can issue an affirmation letter showing an organization’s new name and/or address and affirming the section of the Internal Revenue Code under which IRS records show the organization as tax-exempt and whether contributions to the organization are deductible.

An organization may request a determination letter regarding the effect of certain changes on its public charity status or private foundation status. For example, a determination letter will be issued to reclassify an organization as a public charity or a private foundation. An organization may also request a determination letter showing whether it is exempt from filing annual information returns in certain situations.

If an organization is unsure about whether a proposed change in its purposes or activities is consistent with its status as an exempt organization or as a public charity, it may want to request a private letter ruling. However, the IRS will not make any determination regarding any completed transaction.

On the Net2018-05-13T12:21:23-07:00Legal Issues, Miscellaneous|0 Comments

Arizona Abolishes Charity Registration Requirement

Before September 13, 2013, Arizona law required that all Arizona charities register with the Arizona Secretary of State before soliciting charitable donations in the State of Arizona. The Arizona legislature passed and Arizona Governor Jane Hull signed House Bill 2457, which repealed Arizona’s charitable organization solicitation registration laws and eliminated the requirement that Arizona charities must file annual charitable organization renewal forms with the Arizona Secretary of State.

HB 2457 repealed the following Arizona statutes:

ARS Section 44-6552 Charitable organizations; registration; violation; classification
ARS Section 44-6553 Exemptions
ARS Section 44-6554 Contracted fund raisers; registration, reregistration, contract and disclosure requirements
ARS Section 44-6555 Solicitation disclosure requirements; written confirmation
ARS Section 44-6556 Public records
ARS Section 44-6557 Fiscal records; inspection; retention
ARS Section 44-6558 Exchange of information with other states
ARS Section 44-6559 Rules
ARS Section 44-6560

Richard Keyt2018-01-14T10:38:15-07:00Legal Issues|0 Comments

Arizona Corporation Commission Warns Charities Not to Use Its Form Articles of Organization

The text below is taken from the Arizona Corporation Commission’s instructions for its form Articles of Incorporation for a nonprofit corporation. The ACC Warning is for All Nonprofit Organizations that Intent to be Tax-exempt Organization. If your to be formed nonprofit organization intends to be a charitable organization exempt from federal income tax DO NOT USE THE ARIZONA CORPORATION COMMISSION’S FORM ARTICLES OF INCORPORATION!!!

The following text is the warning the ACC gives to people on page 1 in the middle column of its Instructions for the Articles of Incorporation for a nonprofit corporation:

“The Internal Revenue Service requires that certain language be in the Articles of Incorporation before it will grant tax exempt status. The form provided by the Arizona Corporation Commission complies only with the minimal requirements of Arizona law and does not include any IRS language. If you intend to apply for tax exempt status after the corporation is formed, you should determine what language is required by the IRS and prepare your own Articles of Incorporation. It is advisable to seek the advice of your tax or legal professional and/or the IRS before you form your corporation. The Commission staff cannot give you legal or tax advice, and cannot tell you want language to include in your Articles.“

Translation: The Arizona Corporation Commission is telling people who want to form an Arizona charitable organization to hire an experienced nonprofit organization attorney. Of course I am prejudiced, but I recommend you hire me (a legal professional who has formed 9,300+ Arizona corporations and LLCs and who has a masters degree in federal income tax law from New York University School of Law) to start an Arizona nonprofit organization that intends to become a tax-exempt charity. See my article called “Arizona Nonprofit Corporation Formation Services” for a list of the 28 tasks I perform and 16 documents I prepare when I create an Arizona charitable organization for the extremely low price of $1,297.

Richard Keyt2024-02-01T14:14:52-07:00Legal Issues, Start Up Issues|0 Comments

Top Ten Legal Risks for Nonprofit Boards

This article called “Top 10 in 2010: Legal Risks Facing Nonprofit Boards” discusses seven of the ten risks presented at a conference sponsored by BoardSource. All board members of nonprofit organizations should read this article.

On the Net2018-01-14T10:38:16-07:00Boards of Directors, Legal Issues|0 Comments

Major Gifts: Considerations for Legal Compliance and Avoiding Lawsuits

The Nonprofit Law Blog has a detailed two part article called “Major Gifts: Considerations for Legal Compliance and Avoiding Lawsuits.” Part 1 and part 2 are must reads for nonprofit organizations that desire large financial contributions.

On the Net2012-07-01T18:38:04-07:00Donations, Legal Issues|0 Comments