Sometimes a group of dedicated individuals can really make a difference. Habitat for Humanity, the ASPCA, and the American Cancer Society are examples of non-profit organizations that provide valuable care to those in need. Just as the name says, a non-profit does not pay its members, but instead pours money back into the organization. If you are thinking of forming a Virginia non-profit organization, it’s important to know what steps to take to make your dream come true.
Non-profit organizations are called nonstock corporations in Virginia. A nonstock corporation is usually formed for a non-profit purpose, like running a club or a charitable organization.
What Sets Them Apart.
Besides the obvious reason – one corporation makes money for its members and the other one doesn’t – there are some important differences between for-profit and nonstock organizations. For example, nonstock corporations:
- Are not ‘owned’ by anyone;
- Do not issue dividends;
- Must satisfy IRS requirements to qualify as a §501(c)(3) charitable organization;
- Are managed by a board of directors.
Setting Up a Virginia Nonstock Corporation.
If a group wants to be organized as a nonstock corporation, the following steps may be taken:
- Evaluate the community where you plan to operate. Will your group meet a need? Are any other nonstock corporations already meeting that need?
- Talk to an attorney about restrictions, requirements, and reasons for starting a nonstock corporation.
- Meet IRS requirements, including applying for an Employer Identification Number with the IRS and filing other appropriate forms.
- File articles of incorporation with the Office of the Clerk to get a certificate of incorporation.
- Prepare bylaws and any other required organizational documents.
- Pay any fees, including recurring annual fees.
- If a nonstock corporation is qualified by the IRS and the Commonwealth of Virginia, set up procedures in your organization track and meet all state and federal requirements. Periodically assess the ‘non-profit’ nature of your organization to avoid legal problems.
No matter what your reason is for wanting to organize as a nonstock, make sure it complies with all state and federal laws by consulting with a lawyer.
Interested in Forming a Nonstock Organization?
Contact the Dillon Law Group to discuss your options. Our attorneys have the skill and experience to advise you. Please call us at 757-962-4796 to set up an appointment or contact us online by using our convenient Contact Form. We assist clients in Virginia Beach, Newport News, and surrounding communities.