Guide For Reinstatement of Good Standing With Corporate and Tax Regulatory Agencies For California Nonprofit Public Benefit Corporations

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A California nonprofit public benefit corporation exempt from taxation under section 501(c)(3) of the Internal Revenue Code and section 23701d of the California Revenue and Taxation Code needs to be properly and currently qualified and registered as a nonprofit tax-exempt organization with the various federal and state agencies regulating its activities. If a nonprofit fails to comply with the registration and/or reporting requirements of one or more of the relevant state and federal agencies, it may lose its corporate and/or tax-exempt status.

Depending on the agency or agencies with which the nonprofit organization is no longer in good standing, an out-of-compliance nonprofit may be subject to state or federal income tax, be prohibited from soliciting funds from the public, be unable to enter into contracts, and/or no longer be able to engage in charitable activities. Moreover, donations contributed to the nonprofit during the period in which the nonprofit is out of compliance may not be tax deductible. Therefore, it is critical for a nonprofit that is out of compliance to rectify the situation immediately.

 

Public Counsel’s Community Development Project has designed this guide to assist directors and executive management staff of California nonprofit public benefit corporations, as well as attorneys who are assisting such corporations on a pro bono basis, in understanding how to bring a corporation back into compliance with  relevant state and federal agencies – specifically, the California Secretary of State, California Attorney General, California Franchise Tax Board, and Internal Revenue Service.