How to Form a Mutual Benefit Corporation in California

By Joe Stone

California law provides for several types of nonprofit corporations, one of which is called a mutual benefit corporation. The primary aspect of a mutual benefit corporation is that it is formed and operated solely for the benefit of its members, rather than making a profit. A mutual benefit corporation can be formed for any nonprofit purpose except a charity. To form a mutual benefit corporation in California, you file articles of incorporation with the Secretary of State’s office. You can download a sample form of articles from the secretary's website.

Step 1

Locate the sample form Articles of Incorporation for nonprofit corporations on the secretary of state's website. The form is optional but can be used as a guide to include the basic information needed to draft your own articles.

Step 2

Prepare the articles by inserting the following minimum information: the corporation's name (section I of the sample) and the name and address of the corporation's resident agent for service of process (section III of the sample). If you intend to apply for tax-exempt status for your corporation or are forming the corporation for a public purpose, you must include a statement in the articles specifying the corporation's specific purpose (section IIB of the sample). Section IIA of the sample sets forth mandatory language required by Corporations Code section 7130(b)(1).

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Step 3

Sign the articles at the bottom of the page, as the incorporator, and print or type your name below your signature. Mail the form to the Secretary of State, Document Filing Support Unit, P.O. Box 944260, Sacramento, CA 94244-2600. As of November 2011, a check in the amount $30 is required for the filing fee. You can personally deliver the articles to the secretary's regional office in Los Angeles or Sacramento; however an additional $15 handling fee will apply.

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What Is the Difference Between a Nonprofit and a Mutual-Benefit Corporation?


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