The basic steps are outlined below.
Incorporation. The first step is to incorporate. The primary protection offered by the corporate form is that it protects the people who run and work for the non-profit from personal liability. The organization is incorporated with State of New Jersey, and it must be designated as a non-profit. A Federal Employer Identification Number (EIN) must be obtained as well.
Trustees and Bylaws. To have a non-profit corporation, there must be a board with at least three trustees, each of whom must be at least 18 years old. The non-profit must also have bylaws, which are essentially the organization’s “constitution” — the bylaws set the entity’s purpose, the responsibilities and powers of the people who run the non-profit, and how it will be run.
Many people have the impulse to help their fellow man and to serve worthy causes. One of the most important tools to achieve this end is the non-profit, tax exempt corporation. Forming this type of entity allows funds to be raised without being taxed, permits contributors to deduct their contributions from their income tax, and protects the people working for the organization from personal liability. However, the process can be complex. Our attorneys help people and charitable organizations navigate this complex area.