The Top 5 Things to Consider When Setting Up a Non-Profit in New York
Starting a Non-Profit: Tax Exemptions, Permit, and License Requirements3 min read
Starting a non-profit organization requires a host of considerations, from obtaining recognition of tax exemption to filing for the necessary permits and licenses. The process can be complicated and arduous, making it crucial to have guidance from experienced New York lawyers who understand the intricacies of local regulations and are up-to-date on the rapidly changing non-profit sector. Here are the five key things to consider when setting up a non-profit organization in New York.
1. Choosing the Legal Structure
The first step in forming a non-profit is determining the legal structure of the organization. Non-profits in New York may be registered as private foundations, tax-exempt corporations, associations, unincorporated organizations, and charitable trusts. The type of organization chosen will determine the organization’s legal duties, rights, and liabilities, as well as lay the groundwork for the filing of IRS tax forms, including the 990 return.
2. Obtaining IRS Tax-Exempt Status
Non-profit organizations in the United States are eligible for a federal tax exemption from the IRS under Section 501(c)(3) of the Internal Revenue Code. The application process for tax-exempt status can be lengthy and complicated, so the expertise of a knowledgeable legal professional in this area is essential. An experienced lawyer can also ensure that all the required paperwork is filed in a timely manner, helping to expedite the process and avoid unnecessary delays.
3. Operating and Managing the Organization Properly
Once the legal structure and IRS tax-exempt status have been established, the organization must be operated and managed in accordance with the requirements of the IRS and New York State laws. This includes ensuring that the organization has a board of directors that is responsible for the well-being and integrity of the organization, and that a plan is in place for the management and financial operations of the organization. It is important to ensure that proper financial records are kept and that any funds received by the organization are reported and accounted for.
4. Filing All Necessary State and Federal Forms
Non-profits in New York must also file the necessary state and federal forms, including, but not limited to, their annual reports, tax returns, and any other required paperwork. It is important to work with a knowledgeable lawyer to ensure that all the required forms are filed correctly and in a timely manner. Failing to do so may result in fines or other penalties, and could even put the organization’s tax-exempt status in jeopardy.
5. Ensuring Compliance With Local Regulations and Laws
State and local laws in New York can be complicated and it is essential for non-profit organizations to be aware of and compliant with these regulations in order to maintain their nonprofit status. This includes understanding the rules and regulations of the state attorney general and other relevant agencies, and staying up to date on any changes to the law. Working with an experienced attorney who has a thorough understanding of New York state law and the non-profit sector can help organizations stay compliant with the pertinent regulations and laws.
At the end of the day, setting up and properly establishing a non-profit organization in New York can be a complicated and arduous process. It is therefore important to work with a knowledgeable lawyer who can provide experienced legal counsel and ensure that the organization is fully compliant with both state and federal laws. An experienced legal team can help non-profits navigate the complexities of setting up and managing their organizations and provide essential guidance every step of the way.