The filing requirements for a nonprofit corporation in California starts with filing the appropriate paperwork to form the corporation, and then filing annual paperwork as long as the corporation is in existence. If the nonprofit needs tax-exempt status, it must make the required filings with both the state and federal governments. A nonprofit that acts as a charitable organization is required to file with the attorney general’s office and may have additional filings depending on the nonprofit's yearly gross revenues.
Nonprofit Corporation Initial Filing
To form a California corporation, the incorporator must file the articles of incorporation with the California Secretary of State's office. The information required for the articles depends on the type of nonprofit corporation that is being formed, which can fall into one of three categories: nonprofit religious corporation, nonprofit public benefit corporation, or nonprofit mutual benefit corporation. The secretary of state's office does not require a specific form for the articles, but does provide a sample form for each of the three types of nonprofits through its website. After the articles are properly prepared and accepted for filing by the secretary's office, the nonprofit corporation comes into existence.
A newly formed California nonprofit corporation is not automatically given tax-exempt status. To obtain tax-exempt status for income taxes -- commonly referred to as 501(c)(3) status -- the nonprofit must file Form 1023 with the IRS. If the IRS approves the filing for tax-exempt status, the nonprofit will receive written notification called a "determination letter." To obtain tax-exempt status from California's annual corporation franchise tax, the nonprofit must file a copy of the determination letter along with Form 3500A with the franchise tax board. Although nonprofit organizations in California are generally not exempt from paying or collecting sales and use tax, some limited exemptions from these taxes are available to qualified organizations. Examples of these organizations include nonprofit parent-teacher associations and nonprofit veterans’ organizations. Applications for an exemption are submitted to the state board of equalization.
Every nonprofit corporation must file a form called the "Statement of Information" with the California Secretary of State's office within 90 days of incorporating. The form requires information regarding the address for the nonprofit's principal location, the name and address of its chief executive officer, secretary and chief financial officer, and the name and address of its registered agent for accepting service of legal papers. The nonprofit must file this form every two years throughout the nonprofit's existence. Most nonprofit corporations must also file annually with both with the IRS and franchise tax board, regardless of whether the nonprofit is tax-exempt. Some tax-exempt religious, charitable and political corporations do not have to make this annual filing. Both the IRS and the franchise tax board provide a simplified filing procedure for small tax-exempt nonprofit corporations known as called "e-Postcard" filing.
Nonprofit Charity Filings
A nonprofit corporation operating as a charity in California must file a copy of its articles of incorporation with the attorney general within 30 days of receiving any assets. The nonprofit must also annually file Form RRF-1 with the attorney general and pay a fee determined by the nonprofit’s gross revenue from the preceding year. If the nonprofit’s gross revenues exceed $2 million annually, the nonprofit must have financial statements prepared by an independent certified public accountant and make them available to the attorney general and the public for inspection within nine months after the close of the nonprofit’s fiscal year.
References & Resources
- California Secretary of State: Organization of California Nonprofit, Nonstock Corporations
- IRS: Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code
- California Franchise Tax Board: Submission of Exemption Request (Form 3500A)
- California Board of Equalization: Sales and Use Tax Requirements for Non-Profit and Exempt Charitable Organizations
- California Secretay of State: Instructions For Completing Form SI-100
- California Attorney General: Guide for Charities
- IRS: Annual Exempt Organization Return: Who Must File
- California Franchise Tax Board: Exempt Organizations - Filing Requirements
- IRS: Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard)
- California Franchise Tax Board: Filing Requirements -- California e-Postcard
- California Attorney General: Nonprofit Integrity Act of 2004