Non-profit Corporation San Diego

Non-profit Corporation Summary

Operating a California non-profit corporation may provide a philanthropist the legitimacy and structure to solicit tax exempt charitable donations to support their cause. Upon successfully becoming recognized as a tax-exempt California 501(c)(3) non-profit corporation, the non-profit corporations may:

• Be viewed as more legitimate to potential donors and other sources of funding;

• Receive donations tax free while providing your donors valuable tax deductions;

• Raising capital through privately and publicly funded grants;

• Draw a reasonable salary, allowing you to focus on your philanthropic work full-time.

All California non-profit corporations formed by San Diego Corporate Law include attorney-drafted articles of incorporation, bylaws, federal EIN application, corporate records book, and minutes for the organizational meeting of the board of directors.

California non-profit corporations formed by San Diego Corporate Law may apply for 501(c)(3) or other tax-exempt status include the application to the Internal Revenue Service, California Franchise Tax Board, and California Attorney General’s Registry of Charitable Organizations.

Flat Fee Price

$1,550
  • Includes Filing Fees
  • See Pricing Assumptions
  • No Tax Exemption Filings

Flat Fee Price

$5,250
  • Including Filing Fees
  • See Pricing Assumptions
  • With Tax Exemption Filings

sproles

Michael J. Leonard helped us obtain our 501(c)(3), created our bylaws, and completed all of the necessary forms to establish a tax exempt status for our non-profit foundation. He was professional, quick, and great to work with. Mr. Leonard is also very connected in the community and has referred us to useful contacts.

Michel Sproles, Sproles Empowered Youth

FO

My experience working with San Diego Corporate Law has been nothing short of excellent. Michael Leonard is a tremendous asset, and provided us much needed assistance when forming our insurance agency. He assisted with the formation of our corporation, buy / sell agreement, company bylaws, minutes, and stock certificates. Michael is an utmost professional that I would refer to any friend or client.

Michael Fusco, Fusco & Orsini Insurance Services, Inc.

gwr

Michael J. Leonard at San Diego Corporate Law has provided GWR valuable assistance and professional advice. As a San Diego based high tech equipment manufacturer, we appreciate that we never have to waste his or our time explaining the engineering or scientific details of our situation as his strong, hands on physics and engineering background is invaluable. We are well protected with Mike looking out for our interests.

Richard Reineman, GWR Instruments, Inc.

pattersoneng

In 2009 San Diego Corporate Law converted my Sole Propriety Engineering Company into a “S” Corporation. My experience was painless and Mr. Leonard has done an excellent job staying in contact and continues to be a great advisor. San Diego Corporate Law comes highly recommended.

Curtis Patterson, P.E., Patterson Engineering, Inc.

best-rate-repair

Michael J. Leonard at San Diego Corporate Law is not your typical attorney experience. Michael puts his full attention into understanding your needs and provides the best solution to meet your goals. I highly recommend San Diego Corporate Law to any of my friends and associates.

Jeff A. Mudd, Best-Rate Repair Company, Inc.

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Working with San Diego Corporate Law made dealing with all the paper work of incorporating and setting up my business a dream! Michael is the ultimate professional and knows corporate law inside and out! San Diego Corporate Law is always available to answer questions, assist me with follow up items, and be my go-to and support team.

Elloise Bennett, AP Test Service, LLC

anazana

Mr. Leonard is competent, dependable, and gets the work done on time and within budget. He is very responsible to his customers. We would recommend him to anyone that requires a true professional.

Lidija Skolnija, anaZana, Inc.

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I was recommended to Michael to help me set up a new corporation I was starting. The advice he gave me was great, and I eventually hired his services to create the agreements and contracts between myself and my business partner. Throughout the process he guided me and asked very detailed questions. I felt that he had my back and my best interest at heart. Looking back now, the contracts he wrote have saved me close to $40,000 in money that I would have otherwise had to pay. Thank you Michael. Everyone should follow your standards.

Jason Delfos, Marketing and Advertising Design Group, LLC

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We hired San Diego Corporate Law to help us establish our business in San Diego. In the initial stages of setting up our business and transitioning to California, we were frequently out of town. During this time, Michael answered questions promptly and thoroughly by phone and email. He went above and beyond to keep us on deadline for our aggressive schedule. I would not hesitate to recommend San Diego Corporate Law to another business owner.

Alicia Sorber-Gallegos, Two Men and a Truck

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Having no prior experience with business law, I approached Michael to help me set up an LLC for my new company and help me review my legal disclaimers. Michael was very straightforward, honest and helpful. He took the time to explain every detail and answer all of my questions. His work was very diligent and completed exactly by the deadline promised. Michael and San Diego Corporate Law hold my highest recommendation!

Anton Ivanov, Dreams Cash True

clean-usa-power

Michael J. Leonard helped me configure my business entities into a solid investment vehicle. He is very professional, knowledgeable, easy to reach and timely. San Diego Corporate Law produced a unique and informative Private Placement Memorandum (PPM) for my business for less than half the cost other law firms were charging. I expect to use the PPM and San Diego Corporate Law for many years. I recommend Michael because of his efficient, hands on, practical approach to legal work in a time of dramatic changes with securities laws (JOBS Act).

John Copyak, Clean USA Power, Inc.

MGIV

San Diego Corporate Law helped me set up MGIV Inc and get established as an S-corp in 2013. I was a one man show and didn’t have a substantial amount of money to spend to get started. I was in the process of filing for a LLC through Legalzoom.com when something didn’t feel right. I picked up the phone and asked Michael if he was available to help. This was my first business so I knew nothing about filing for a corporation or legally establishing a business. Using his knowledge and expertise he coached me toward filing for an S-corp instead of an LLC. It saved the corporation $800 in 2013 and positioned it for success based on the MGIV Communication Consulting model. I find comfort knowing that my business is in good hands. Michael is a great resource and very personable so working with him is convenient and affordable! I recommend San Diego Corporate Law to anyone needing legal assistance with their business!

Michael Gordon IV, MGIV, Inc.

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When I needed to move my business from an office suite to a brick and mortar location, San Diego Corporate Law was instrumental in ensuring that the lease provisions were in my best interests. The specialized skills that Michael and his team possess, the fair and transparent fee structure, and their professional yet low pressure consultation process are the reasons why I will retain their services in the future.

Scott Weathers, Alpha Graphics La Jolla

cram

Michael J. Leonard at San Diego Corporate Law not only helped us establish our small business in San Diego, but he helped us to solidify our partnership to avoid any gray areas as we are a family-run business. Michael was easy to work with, knowledgeable, responsive, and professional, and we will continue to use him as our company lawyer moving forward.

Karen Posner, Camp Run-A-Mutt Sorrento Valley

kamo1

I have nothing but compliments to say about San Diego Corporate Law. Michael and his team have always delivered not only an extremely high level of service, but also have been so patient through the whole process of setting up our LLC. Whenever I have questions or need their service, they are very easy to communicate with and very reasonably priced. I will not only use them for any legal advice that I may need in the future, but also refer all the people that may also need their services.

Andrey Kamogari, Kamo Housing

mending-matters-teal

Michael assisted us with the process of incorporating our non-profit organization. Michael was responsive to all of our questions, and sensitive to the expedited timelines that we encountered. Among the best aspects we experienced in working with Michael was his appreciation for our specific goals and his candid and honest guidance to accomplish those objectives. I would highly recommend Michael Leonard and San Diego Corporate Law.

Esther Hemmen, Mending Matters

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San Diego Corporate Law has been a crucial partner for Little Black Diamond. Whether it’s routine incorporation paperwork or complex employment law, Michael is always very responsive and available to help handle our legal issues. He takes the time to understand your business and the unique issues that surround it in order to provide accurate and timely advice that considers the best interest of your business. San Diego Corporate Law is a true partner for any business.

Adam Rosenberg, Little Black Diamond, LLC

California Non-profit Corporation San Diego Details

Overview

The most common organizational structure for a non-profit is the corporation. There are three main types of non-profit corporations: (1) public benefit, (2) mutual benefit, and (3) religious corporations. Each California non-profit corporation type has distinguishing characteristics, but the three also share many common features. By filing articles of incorporation and paying the required $30 fee to the Secretary of State, one or more persons may form a California non-profit corporation. California Corporations Code §§ 5120(a), 7120(a), 9120(a); California Government Code § 12186(d). After filing articles of incorporation, bylaws must be adopted to structure internal governance and provide notice to directors regarding the law governing the California non-profit corporation. California Corporations Code §§ 5150-5151, 7150-7151, 9150-9151. A California non-profit corporation may be dissolved voluntarily by an affirmative vote of the members, if any, or the directors. California Corporations Code §§ 6610, 8610, 9680.

Advantages

The California non-profit corporation form is an established and well-understood entity governed by clear statutory norms in areas such as permitted activities, director and member liability, director standards of conduct, indemnification of agents, and internal governance.

California non-profit corporations have the power to purchase property, enter into contracts, carry on a business, and issue memberships. California Corporations Code §§ 5140, 7140, 9140. The board of directors of a California non-profit corporation has control of the direction of management and the exercise of corporate powers. California Corporations Code §§ 5210, 7210, 9210.

Members, directors, and officers of California non-profit corporations are indemnified from personal liability for the non-profit’s debts, liabilities and obligations. California Corporate Code §§ 5350(a), 7350(a), 9350(a). If a director, officer, or trustee of a California non-profit corporation is uncompensated, he or she may be protected from liability. California Corporations Code §§ 5047.5, 5239, 7231.5, 9247; and §§9.115-9.120. Directors of California non-profit corporations performing duties in accordance with the statutory standard of care are not liable for any alleged failure to discharge directorship obligations. California Corporations Code §§ 5231(c), 7231(c), 9241(d).

California non-profit corporations may also choose to indemnify directors and officers from litigation expenses under certain statutory conditions. California Corporations Code §§ 5238, 7237, 9246; and §§9.156-9.162.

Disadvantages

The cost and time required to comply with government filing requirements, the observance of corporate formalities, and the regulations limiting non-profit activities are disadvantages of forming a California non-profit corporation. However, unless the proposed non-profit organization is extremely small, these disadvantages are outweighed by the advantages of the non-profit corporate form.

Tax-Exempt Status

Non-profit vs. Tax Exempt

The terms “non-profit” and “tax exempt” or “501(c)(3)” are often used interchangeably, although use of these terms as synonyms is incorrect. Most California non-profit corporations are eligible to apply for tax-exempt status, such as 501(c)(3) status, and many California non-profit corporations will benefit from tax-exempt status, such as 501(c)(3), but certain businesses operated by California non-profit corporations are not eligible for tax-exempt status.

Tax Exemption Categories

Under Internal Revenue Code § 501(c) there are twenty-eight different categories for tax-exempt status, and most of these are provided tax exemption by the State of California under California Revenue and Taxation Code § 23701.

The most frequently used categories are for charities, social welfare and lobbying, labor unions, trade and business associations, social clubs and veteran’s groups. Internal Revenue Code §§ 501(c)(3), 501(c)(4), Internal Revenue Code § 501(c)(5), 501(c)(6), 501(c)(7), 501(c)(19). Most of the income and donations received by these organizations are exempt from taxation.

Donors to certain tax-exempt organizations, especially those exempt under Internal Revenue Code § 501(c)(3), may offer personal tax deductions to donors for contributions given. When available, these personal tax deductions may act to significantly stimulate donor contributions.

Burdens on Tax-Exempt Non-profit Operation

The potential costs and regulatory burdens of tax-exempt operation under 501(c)(3) and other tax exemptions should be considered before applying for exempt status. The tax-exempt status alone is costly and may consume a great deal of non-profit resources. Tax-exempt organizations, such as a 501(c)(3), also must frequently prepare filings and reports and are subject to public inspection. Tax-exempt organizations under 501(c)(3) and other tax exemptions are commonly subjected to tax and other government audits. California non-profit corporations having obtained 501(c)3) or another tax exemption face numerous restrictions on activities, management, control and asset allocation and sources.

Table of Available Tax Exemptions

Description Federal Exemption California Exemption Deductions Tax Deductible?
Corporation formed and granted exemption by Act of Congress 501(c)(1) None Required Yes, if for exclusively public purposes
Corporation that holds title to property for another exempt organization 501(c)(2) 23701h No
Organizations organized and operated exclusively for purposes that are charitable, religious, scientific, testing for public safety, literary, educational, fostering amateur sports competition, or preventing cruelty to children or animals 501(c)(3) 23701d Yes
Social welfare organizations (includes organizations that lobby substantially); local associations of employees 501(c)(4) 23701f No
Labor, agricultural, or horticultural organizations 501(c)(5) 23701a No
Business leagues, chambers of commerce, real estate boards, trade associations, and professional football leagues 501(c)(6) 23701e No
Social clubs 501(c)(7) 23701g No
Fraternal societies that provide insurance or similar benefits to members 501(c)(8) 23701i Yes, if limited to charitable purposes
Voluntary employees’ beneficiary associations (VEBAs) 501(c)(9) 23701l No
Fraternal societies that do not provide insurance to members 501(c)(10) 23701j Yes, if limited to charitable purposes
Teachers’ retirement fund associations 501(c)(11) None No
Local benevolent life insurance associations, mutual ditch or irrigation companies, and cooperative telephone companies 501(c)(12) 23701c No
Cemetery companies 501(c)(13) 23701y Yes
Credit unions and mutual insurance funds 501(c)(14) 23701z No
Certain small insurance companies 501(c)(15) None No
Corporations that provide crop financing 501(c)(16) 23701n No
Supplemental unemployment benefit trusts 501(c)(17) 23701s No
Certain pre-1959 employee funded pension plans 501(c)(18) 23701w No
Veterans’ organizations 501(c)(19) None Yes, in certain cases
Group legal services plans 501(c)(20) None No
Black lung benefit trusts 501(c)(21) None No
Certain ERISA trusts 501(c)(22) None No
Certain organizations that provide insurance to veterans 501(c)(23) None No
Certain Other ERISA Trusts 501(c)(24) None No
Certain title-holding corporations 501(c)(25) 23701x No
Membership organizations that provide medical insurance for the difficult to insure 501(c)(26) None No
Certain state-formed workers’ compensation organizations 501(c)(27) None No
National Railroad Retirement Investment Trust established under 45 USC §231n(j) 501(c)(28) None No
Religious or apostolic corporations 501(d) 23701k No
Political organizations 527 23701r No
Homeowners associations 528 23701t No


Nonprofit or 501(c)(3) Questions?

Send us an Email or call us at 858.483.9200