To get the ball rolling in forming a tax-exempt charitable organization there are just two main documents to put in place. Seriously, just two–articles of incorporation and bylaws. Let’s start with exploring the components of what should be in your nonprofit’s articles of incorporation. (We’ll dig into bylaws in another post!)
Articles of Incorporation
Think of articles of incorporation as the constitution of your nonprofit. While articles of incorporation can be fairly short, there are some necessary elements required under both Iowa and federal law to gain and retain that golden tax-exempt status.
Legal Requirements in Iowa for a Nonprofit’s Articles of Incorporation
Under Iowa law, articles of incorporation for a nonprofit must contain the following:
A corporate name which satisfies two requirements.
First, the corporate name must be distinguishable from any other nonprofit or business authorized to do business in Iowa. In other words, the name must be different and unique from all other names – even if it’s different by just a single letter. For example, no one could incorporate using the name, “Gordon Fischer Law Firm.” But if there were another lawyer with my name, he could legally incorporate simply by naming his business, “Gordon R. Fischer Law Firm,” or “The Gordon Fischer Law Firm.”
The second requirement is that the name does not contain language stating or implying that the corporation is organized for an unlawful purpose. To take an extreme example, “The Nonprofit Association of Heroin Dealers” would not be a proper name (in addition to many other legal issues!).
The address of the corporation’s initial registered office and the name of its initial registered agent at that office.
The “registered agent” is a legal name for “contact person”–the person who will be mailed if there’s any sort of problem or issue with the corporation. The “initial registered office” is simply that person’s (the registered agent’s) physical address, like a home address. It cannot be a PO Box; it must be a street address.
Be certain that the registered agent is responsible and involved. There can be obvious, profoundly negative consequences if the Iowa Secretary of State, or a taxing and/or regulatory agency (like the IRS) were to mail to the registered agent, and the registered agent doesn’t see the mail, and/or doesn’t provide the mail to the organization.
The name and address of each incorporator.
The “incorporator” is a legal term meaning the founder(s); the person(s) responsible for starting the nonprofit.
Whether or not the nonprofit will have members.
Unlike a regular corporation, a nonprofit does not have stockholders. (Of course, this is because nonprofits do not issue stock.) Instead, nonprofit can choose to have “members.” A formal “membership” structure often grants members certain basic rights, such as the power to vote for directors and approve a sale or merger. Most nonprofits (especially smaller ones) do not have members, due to the additional paperwork and required formalities. Instead, most nonprofits instead rely on their board of directors. In any case, a nonprofit must formally declare in their articles whether or not it will have members.
Provisions not inconsistent with law regarding the distribution of assets on dissolution.
When a nonprofit dissolves (i.e., terminates), any remaining assets must be distributed to another nonprofit (or government entity for a public purpose). No individual or group can be unduly enriched when a nonprofit ends. And, if you think about it, that makes a lot of sense. Folks contribute to a nonprofit to support its tax-exempt purposes, they wouldn’t want their funds to end up supporting non-charitable purposes.
An incorporator must sign and file the articles of incorporation.
The articles of incorporation must be filed with the Iowa Secretary of State’s office (and the ISOS will check that all the requirements above are met before filing is allowed). Currently, the filing fee is $20.00.
Federal Legal Requirements for a Nonprofit’s Articles of Incorporation
Of course, like all organizations, a nonprofit is governed by both state and federal law. Simplifying a bit, the IRS has two major requirements for a nonprofit’s initial governing documents.
The articles of incorporation must limit the nonprofit’s purposes to exempt purposes set forth in Internal Revenue Code Section 501(c)(3). The exempt purposes set forth in section 501(c)(3) are “charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.” An explicit reference or citation to 501(c)(3) and one or more exempt purposes is sufficient to meet this requirement.
In addition, an organization’s assets must be permanently dedicated to an exempt purpose. This means that if an organization dissolves, its assets must be distributed for an exempt purpose pursuant to 501(c)(3), or to the federal or state government or a local government entity, for a public purpose.
Amended and Restated Articles of Incorporation
No doubt some of you are thinking, hey, we already have articles of incorporation! Sure, we may need better articles, or improved articles, but we do have them.
In such cases, when a nonprofit wants to update or revise current articles, the organization files with the Iowa Secretary of State what is known as “amended and restated articles of incorporation.” These amended and restated articles completely supplant the earlier articles.
If filing amended and restated articles, Iowa law requires a statement in the document to the affect that all the amendments, changes, revisions, etc. are reflected in this new, single document. To meet this requirement, I use this statement:
“I [the incorporator] hereby certify that these Amended and Restated Articles of Incorporation consolidate all amendments into this single document.”
So, How Do I Go About Getting Articles of Incorporation
Each organization is unique and it’s smart to enlist someone (like an attorney well-versed in nonprofit law!) to draft a quality, comprehensive set of articles personalized for your nonprofit’s needs, mission, and goals.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/11/Screen-Shot-2018-11-14-at-10.18.07-PM.png6881045Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2021-06-21 09:00:182021-06-20 14:24:22Articles of Incorporation: Like a Nonprofit's "Constitution"
To all the dads out there, happy Father’s Day! We all have our own unique relationships and therefore unique lists with an endless number of things we can and should thank our dads for. But the one thing we all have in common is there are not enough words and never the perfect gifts that fully encompass how thankful we are for all they’ve given us. A dapper tie, classic “#1 dad” t-shirt, a new tool for the toolbox, the hippest craft beers, these are all great. These gifts are kind, but they pale in comparison to all the tangible and intangible things your *pops* has given you over the years.
That’s why I propose this year you give your father a gift that’s unconventional, yet incredibly valuable…an estate plan! Why is this one of the greatest gifts for a loved one?
An estate plan leads to peace of mind. Your dad can feel good knowing if the unexpected happens, then the legal “stuff” surrounding your life is accounted for.
Estate planning means that you (the testator) get to make the decisions about who you want to have what stuff and when.
Estate planning isn’t just about death. Documents like financial and health care powers of attorney play an important role if (gosh forbid!) your father were to be incapacitated by an accident or illness. Everyone wants the ability to choose the people they want to make important decisions regarding their money and health instead of a court-appointed guardian or conservator.
Estate planning saves your family (including dads for sure!) time and money in attorney’s fees and court costs in the probate process.
By encouraging your father to execute an estate plan, you are recognizing that you want his wishes to be heard on important matters like disposition of final remains and a living will. (It makes up for all the times you didn’t follow directions as a kid!)
Estate plans can also be seen as a representation of your everlasting love for your father, because estate plans never expire! They need to be reviewed regularly and updated when goals or big life-changing events happen, but a valid estate plan will last as long as your mom wants it to. What other Father’s Day gifts can you say that about?
Help your father leave an enduring legacy. Estate planning means your dad can plan for his estate to benefit the causes and organizations he cares for through charitable bequests.
How do you gift someone an estate plan you ask? Well, you certainly can’t buy one at a store, but this is your chance to get creative.
Gift the gift of information.Even sharing the benefits and educating your dad on the main components of an estate plan is an amazing present.
Connect him with an estate planning attorney.Sometimes the hardest part of estate planning is simply getting started. When you work with an estate planning attorney (in lieu of something with a high potential for negative unintended consequences like a DIY will off the internet), they help guide and consult you through the process on top of writing the actual documents.
Give a storage container.This is a gift you could actually put a bow on! There are many different ways you can choose to store your estate plan, so take stock of what your father has in terms of secure storage. Is there a locked file cabinet readily available or does he need a water-proof, fire-proof place to keep his original estate plan? The storage container could be a sort of representative for the estate plan that is to come.
Help dad gather information to fill out an Estate Plan Questionnaire. An Estate Plan Questionnaire helps you and your attorney collect all the important details related to your estate in one place.
Gift your assistance. Let your father know that when he’s ready to discuss his planning decisions that you’ll be there to listen, and if necessary, bring your siblings (if any) and all other family members to the table so that everyone is on the same page.
Already got your dad a gift? That’s wonderful! I’m sure he would love it in addition to an estate plan!
Questions, concerns, or otherwise from you or your father? Contact me at any time via email or phone (515-371-6077).
https://www.gordonfischerlawfirm.com/wp-content/uploads/2019/06/Screen-Shot-2019-06-16-at-11.32.01-PM.png514766Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2021-06-20 14:33:402022-01-10 14:35:23Happy Father’s Day! Give Dad A Gift That Lasts Forever!
The report is pretty basic and is essentially entity information updates of which the Iowa Secretary of State’s office records. Report requirements vary by state, so I’ve laid out all the basics below!
When is my nonprofit’s Biennial Report due?
Biennial Reports should be submitted between January 1 and April 1 in odd-numbered years (like this one, 2019!). An organization’s first Biennial Report is due on the first odd-numbered year following the calendar year of formation. So, if your nonprofit was formed (meaning you submitted articles of incorporation) in October 2019, the first Biennial Report would be due by April 1, 2021.
Does someone have to sign it? Does it need to be notarized?
Yes; someone with authority in the organization should sign it (such as the president of the board of directors), however, original signatures are not required. Notarization is also not required.
What information is included in the biennial report?
The statute requires the following information be reported. (Note that a nonprofit is still a “corporate” entity, even though we don’t typically refer to nonprofit organizations like corporations.):
Name of the corporation
State or country under whose law the nonprofit incorporated
Address of the corporation’s registered office
Name of the corporation’s registered agent at that office in Iowa
Consent of any new registered agent, if applicable
Address of the corporation’s principal office
Names and addresses of the president, secretary, treasurer, and one member of the board of directors
Whether or not the corporation has members
The information on the Biennial Report should be related to the two-year period immediately preceding the calendar year in which the report is filed.
Is there a form?
Yes, there is a form you can file online or by mail. You will need both the corporation number and a temporary code to begin the filing process. Each corporation’s registered agent will receive a Biennial Report notice in early January.
Does it cost money?
Unlike the costs for LLCs or for-profit corporations, for nonprofit corporations, the filing fee is $0.
Other Considerations
While you’re thinking about reporting, once you have the Biennial Report submitted turn your attention to Form 990. Do you know which version you can submit? Do you need to adopt any beneficial policies and procedures to boost your filing (and amplify good governance and successful operations in your organization)?
Don’t hesitate to contact me with questions about any forms and reporting. It can seem like a pain at first, but the more prepared you are and the more knowledge you have, the faster you can get back to work, forwarding your mission.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2019/01/Screen-Shot-2019-01-24-at-10.43.28-PM.png660907Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2021-06-19 09:00:152021-06-08 13:32:22Nonprofit Need to Know: File the Iowa Biennial Report
Articles of Incorporation: Like a Nonprofit’s “Constitution”
NonprofitsTo get the ball rolling in forming a tax-exempt charitable organization there are just two main documents to put in place. Seriously, just two–articles of incorporation and bylaws. Let’s start with exploring the components of what should be in your nonprofit’s articles of incorporation. (We’ll dig into bylaws in another post!)
Articles of Incorporation
Think of articles of incorporation as the constitution of your nonprofit. While articles of incorporation can be fairly short, there are some necessary elements required under both Iowa and federal law to gain and retain that golden tax-exempt status.
Legal Requirements in Iowa for a Nonprofit’s Articles of Incorporation
Under Iowa law, articles of incorporation for a nonprofit must contain the following:
A corporate name which satisfies two requirements.
First, the corporate name must be distinguishable from any other nonprofit or business authorized to do business in Iowa. In other words, the name must be different and unique from all other names – even if it’s different by just a single letter. For example, no one could incorporate using the name, “Gordon Fischer Law Firm.” But if there were another lawyer with my name, he could legally incorporate simply by naming his business, “Gordon R. Fischer Law Firm,” or “The Gordon Fischer Law Firm.”
The second requirement is that the name does not contain language stating or implying that the corporation is organized for an unlawful purpose. To take an extreme example, “The Nonprofit Association of Heroin Dealers” would not be a proper name (in addition to many other legal issues!).
The address of the corporation’s initial registered office and the name of its initial registered agent at that office.
The “registered agent” is a legal name for “contact person”–the person who will be mailed if there’s any sort of problem or issue with the corporation. The “initial registered office” is simply that person’s (the registered agent’s) physical address, like a home address. It cannot be a PO Box; it must be a street address.
Be certain that the registered agent is responsible and involved. There can be obvious, profoundly negative consequences if the Iowa Secretary of State, or a taxing and/or regulatory agency (like the IRS) were to mail to the registered agent, and the registered agent doesn’t see the mail, and/or doesn’t provide the mail to the organization.
The name and address of each incorporator.
The “incorporator” is a legal term meaning the founder(s); the person(s) responsible for starting the nonprofit.
Whether or not the nonprofit will have members.
Unlike a regular corporation, a nonprofit does not have stockholders. (Of course, this is because nonprofits do not issue stock.) Instead, nonprofit can choose to have “members.” A formal “membership” structure often grants members certain basic rights, such as the power to vote for directors and approve a sale or merger. Most nonprofits (especially smaller ones) do not have members, due to the additional paperwork and required formalities. Instead, most nonprofits instead rely on their board of directors. In any case, a nonprofit must formally declare in their articles whether or not it will have members.
Provisions not inconsistent with law regarding the distribution of assets on dissolution.
When a nonprofit dissolves (i.e., terminates), any remaining assets must be distributed to another nonprofit (or government entity for a public purpose). No individual or group can be unduly enriched when a nonprofit ends. And, if you think about it, that makes a lot of sense. Folks contribute to a nonprofit to support its tax-exempt purposes, they wouldn’t want their funds to end up supporting non-charitable purposes.
An incorporator must sign and file the articles of incorporation.
The articles of incorporation must be filed with the Iowa Secretary of State’s office (and the ISOS will check that all the requirements above are met before filing is allowed). Currently, the filing fee is $20.00.
Federal Legal Requirements for a Nonprofit’s Articles of Incorporation
Of course, like all organizations, a nonprofit is governed by both state and federal law. Simplifying a bit, the IRS has two major requirements for a nonprofit’s initial governing documents.
Amended and Restated Articles of Incorporation
No doubt some of you are thinking, hey, we already have articles of incorporation! Sure, we may need better articles, or improved articles, but we do have them.
In such cases, when a nonprofit wants to update or revise current articles, the organization files with the Iowa Secretary of State what is known as “amended and restated articles of incorporation.” These amended and restated articles completely supplant the earlier articles.
If filing amended and restated articles, Iowa law requires a statement in the document to the affect that all the amendments, changes, revisions, etc. are reflected in this new, single document. To meet this requirement, I use this statement:
“I [the incorporator] hereby certify that these Amended and Restated Articles of Incorporation consolidate all amendments into this single document.”
So, How Do I Go About Getting Articles of Incorporation
Each organization is unique and it’s smart to enlist someone (like an attorney well-versed in nonprofit law!) to draft a quality, comprehensive set of articles personalized for your nonprofit’s needs, mission, and goals.
Questions? Want to learn more about turning your dream of an organization that makes a significant impact or positive change? Grab my complimentary Nonprofit Formation Guide and then contact GFLF for a free consult!
Happy Father’s Day! Give Dad A Gift That Lasts Forever!
Charitable Giving, Estates & Estate Planning, Powers of Attorney, Trusts, Wills, Wills, Trusts & EstatesTo all the dads out there, happy Father’s Day! We all have our own unique relationships and therefore unique lists with an endless number of things we can and should thank our dads for. But the one thing we all have in common is there are not enough words and never the perfect gifts that fully encompass how thankful we are for all they’ve given us. A dapper tie, classic “#1 dad” t-shirt, a new tool for the toolbox, the hippest craft beers, these are all great. These gifts are kind, but they pale in comparison to all the tangible and intangible things your *pops* has given you over the years.
That’s why I propose this year you give your father a gift that’s unconventional, yet incredibly valuable…an estate plan! Why is this one of the greatest gifts for a loved one?
How do you gift someone an estate plan you ask? Well, you certainly can’t buy one at a store, but this is your chance to get creative.
Already got your dad a gift? That’s wonderful! I’m sure he would love it in addition to an estate plan!
Questions, concerns, or otherwise from you or your father? Contact me at any time via email or phone (515-371-6077).
Nonprofit Need to Know: File the Iowa Biennial Report
NonprofitsI’ve written a lot about IRS Form 990 on this blog, but all nonprofits organized in Iowa or authorized to business in the state also need to file a Biennial Report with the office of the Iowa Secretary of State. The report is required under Iowa Code §504.1613.
The report is pretty basic and is essentially entity information updates of which the Iowa Secretary of State’s office records. Report requirements vary by state, so I’ve laid out all the basics below!
When is my nonprofit’s Biennial Report due?
Biennial Reports should be submitted between January 1 and April 1 in odd-numbered years (like this one, 2019!). An organization’s first Biennial Report is due on the first odd-numbered year following the calendar year of formation. So, if your nonprofit was formed (meaning you submitted articles of incorporation) in October 2019, the first Biennial Report would be due by April 1, 2021.
Does someone have to sign it? Does it need to be notarized?
Yes; someone with authority in the organization should sign it (such as the president of the board of directors), however, original signatures are not required. Notarization is also not required.
What information is included in the biennial report?
The statute requires the following information be reported. (Note that a nonprofit is still a “corporate” entity, even though we don’t typically refer to nonprofit organizations like corporations.):
The information on the Biennial Report should be related to the two-year period immediately preceding the calendar year in which the report is filed.
Is there a form?
Yes, there is a form you can file online or by mail. You will need both the corporation number and a temporary code to begin the filing process. Each corporation’s registered agent will receive a Biennial Report notice in early January.
Does it cost money?
Unlike the costs for LLCs or for-profit corporations, for nonprofit corporations, the filing fee is $0.
Other Considerations
While you’re thinking about reporting, once you have the Biennial Report submitted turn your attention to Form 990. Do you know which version you can submit? Do you need to adopt any beneficial policies and procedures to boost your filing (and amplify good governance and successful operations in your organization)?
Don’t hesitate to contact me with questions about any forms and reporting. It can seem like a pain at first, but the more prepared you are and the more knowledge you have, the faster you can get back to work, forwarding your mission.