How to start a nonprofit organization in California

How to start a California non profit organization:

  • First you decide which type of California non profit you want to be.
  • You file articles of incorporation with the CA SOS.
  • You get an EIN number with the IRS.
  • If you want to be a California tax exempt organization, you apply for tax exemption first with the IRS, and then at the state level with the California Franchise Tax Board.
  • Finally, if you want to fundraise, you register with the CA Attorney General, Registry of Charitable Trusts to get your official charity registration.

Once you’re ready:

  1. You deliver your CA nonprofit articles of incorporation to the Secretary of State for filing.
  2. The California SOS will approve your filing and send a copy of it to the CA Attorney General.
  3. When figuring out how to start a non profit organization in California, you shouldn’t be doing this alone. The state will require there be more people involved than just one person. When getting together to make the final decision to start a CA nonprofit, make sure to decide who will serve as the initial directors. Decide who or whom will fund the initial formation fees and expenses and if and when the CA nonprofit will pay these people back. Appoint one person to take care of the formalities of filing the articles of incorporation or dealing with a company you hire to do so for the CA nonprofit.

What types of non profit entities are allowed in CA?

There are three types of non profit organizations in California, Mutual Benefit non profit, Public Benefit non profit and Religious non profit. Technically, all CA nonprofits are actually corporations.

A CA mutual benefit corporation is typically not tax exempt.  This type of nonprofit is usually for a group of people who will mutually benefit from the acts of the CA nonprofit.  (An example would be a condo association, business association, or chamber of commerce).

A CA religious corporation is typically for a church and would be tax exempt.

A CA public benefit corporation is almost always going to have the goals of accomplishing tax exempt status.  This typically means anyone and everyone will benefit from the deeds of the CA nonprofit.

Does my CA nonprofit organization have to have a corporate ending?

Yes, it needs to have: Inc, Co, Corp, Ltd, Limited, Incorporated, Company, Corporation, or a variety.

How long does it take to get a CA non profit organization started?

Initial formation: Two months unless you pay the extra expedite fee.
IRS tax exemption: Three months.
CA State tax exemption:  Four months.
CA charity and fundraising registration:  90 days.

How much will it cost to start a non profit organization in California?

The formation:  $30 for two month processing.  $350 extra for 24 hour processing An initial CA Secretary of State report is required after you form the California nonprofit.  This costs $20.
Application for IRS tax exemption:  $400 for planned income below $10,000/yr. If more, pay $850.
Application for CA tax exemption:  $25 CA charity and fundraising registration with the CA Attorney General:  $25

Does California require a specific purpose of the organization be listed on the CA articles of incorporation?

If you are forming a California public benefit nonprofit corporation, you do have to be specific.  The IRS will require specific language if you want the IRS to approve your 501c3 tax exempt status.  The other types of nonprofit corporations do not require specific purpose language, but you probably still should include it.

Does California require officers and directors to be listed initially?

No.  If you do list directors, they all have to sign the non-profit articles of incorporation, so most people do not list the initial directors.  You should know who they are before making the filing though.

Can I start a nonprofit in California that has members?

California does allow nonprofit organizations to have members.  It does not require you list this information on the articles of incorporation.  You can list it if you want though.  In California the rules of membership are maintained in the California non profit bylaws.  Bylaws are not filed with the CA SOS.  They are kept internally.

Should I apply for tax exemption or just forget about it?

Non-profits can apply to for California sales and use tax exemption as well as California franchise tax exemption. CA has an $800 minimum franchise tax payment, so it would be nice to not pay that.

What are the requirements to keep my California nonprofit organization active?

Your CA nonprofit will need to file biannual reports with the Secretary of State and annual reports with the Attorney General and the Franchise Tax Board:

File a California Statement of Information with a $20 fee to the Secretary of State biennially by your filing anniversary.

File an Annual Renewal with the Attorney General each year by April 15th. The fee is $0 to $300 depending on your annual revenue.

File an Annual Return each year by May 15th with the CA Franchise Tax Board.

Do I need to register before I fundraise in California?

Yes, you have to register your non profit as a California charity with the Attorney General, Registry of Charitable Trusts. File form CT-1 (Initial Registration) with the $25 registration fee before you start seeking charitable funds.

California Non Profit Incorporation Agency:

California Secretary of State
Document Filing Support Unit
P.O. Box 944260
Sacramento, CA 94244-2600
Ph: (916) 657-5448

Walk it in:
Business Programs Division
1500 11th St., 3rd Floor
Sacramento, CA 95814