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Questions Answered by Matthew Morris
1 Answer | Asked in Business Law for South Carolina on
Q: What documents need to be filed to add new directors to an established 501c3 nonprofit in South Carolina?

Would this be done using the Articles of Amendment on the Secretary of State website? If so, would it be added in the Additional Amendment Info area and what wording should be used?

Matthew Morris
Matthew Morris
answered on Feb 17, 2023

It's very unlikely that you need to file anything with the state to add new directors. It is likely that your 501(c)(3)'s bylaws contain a provision that sets out the minimum and maximum numbers of directors and how the directors are chosen. To add new directors, your most likely course... View More

1 Answer | Asked in Public Benefits and Business Law for California on
Q: Need advice on requirements on unifying an unincorporated association with a public benefit corporation.

We are an unincorporated association with members that do philanthropic work in the community. We want to unify with our sister entity, a public benefit corporation which manages the property we and other community groups use for meetings. The members of the public benefit corporation are the... View More

Matthew Morris
Matthew Morris
answered on Jan 10, 2023

An unincorporated association does not need permission from the Secretary of State to give away its property and dissolve, but an unincorporated association that exists for charitable purposes almost certainly needs to get permission from the Attorney General's office. Groups that have assets... View More

1 Answer | Asked in Public Benefits and Business Law for California on
Q: What methods may a public benefit corporation in California use for member voting? Is in person plus mail in ok?

We need a quorum of 50% of members to pass a resolution. We may not have 50% available to vote in person. Is an email ballot to be mailed in and opened during the meeting sufficient?

Matthew Morris
Matthew Morris
answered on Jan 10, 2023

The law allows for voting by mail or email, but the question of whether a particular organization can take advantage of those methods depends on certain facts.

To start with "unless prohibited in the articles or bylaws, any action which may be taken at any regular or special meeting of...
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1 Answer | Asked in Business Law for Illinois on
Q: Can a Non-profit operate a for profit? We are thinking of transitioning but have a DBA Voc. school we want to keep.

Our school usually operates by training grants or direct training paid by other agencies training grants. Students rarely pay for tuition themselves. We serve low skilled, low-income individuals. It is a main part of the services we provide (especially as we pursue programmatic grants with... View More

Matthew Morris
Matthew Morris
answered on Dec 11, 2022

To answer your first question, "can a nonprofit operate a for-profit," there is nothing that prohibits this and it happens fairly frequently. Depending on the details, the for-profit enterprise can be a wholly- or majority-owned subsidiary of the nonprofit. You will want to be very... View More

1 Answer | Asked in Public Benefits for California on
Q: Is a California nonprofit public benefit corporation required to distribute a percentage of its assets annually ?
Matthew Morris
Matthew Morris
answered on Dec 3, 2022

It depends.

Let's start with one assumption: that there is no provision in the corporation's bylaws or other governing documents that requires distributions. If the governing body of the corporation has voted to require annual distributions, then the leadership of the...
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2 Answers | Asked in Banking, Business Formation and Business Law for California on
Q: I just started a non-profit LLC company so what are the next steps in legally keeping my company in good standing?

Beginning of this month I filed my articles of incorporation and today the Secretary of State of California approved the articles of incorporation and I am unsure what to do next?

Matthew Morris
Matthew Morris
answered on Sep 24, 2022

Congratulations on starting your nonprofit. You have chosen an unusual path by using the LLC formation method. One of the first things you will likely want to do is to file a "statement of information" with the Secretary of State -- usually within about 90 days from when you filed your... View More

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1 Answer | Asked in Business Law for California on
Q: What is code 1502

Hi we are running small church for Wthiopian community and we received a letter that we should submit some form by October 22,2022 along with a check of $243

We are new to USA system and have no idea what this means. We are non revenue church but not business. What shall we do?

Matthew Morris
Matthew Morris
answered on Sep 14, 2022

Even though your church is not a business, in California it was probably organized as a "Religious Corporation" under the California nonprofit corporations law. Corporations in California, even churches, are required to file a "Statement of Information" with the California... View More

2 Answers | Asked in Business Formation and Business Law for Illinois on
Q: Do we need to refile articles of incorporation or any other business docs when applying for NFP status for a for-profit

business. Business has been around for 37 years. We want to apply for 501c3 status to diversify our income and open up our services to more contracts and help more people. Currently, mostly are federal grants and we haven't earned profit in years.

Matthew Morris
Matthew Morris
answered on Sep 14, 2022

You will almost certainly need to re-draft your Articles of Incorporation if you want to convert from a for-profit corporation to a not-for-profit corporation.

First, under Illinois law your new not-for-profit is required to have, as its purpose, one of the allowable purposes listed in the...
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1 Answer | Asked in Tax Law and Business Law for New York on
Q: Can I request nonprofit bylaws from the IRS without the nonprofit being notified of the request?

I started working 3 years ago in a registered 501c3 (school) in New York. I am a school leader and requested to see a copy of the school bylaws so I could understand as much as possible about how the school works. I was told it was an inappropriate request. I have concerns about board governance... View More

Matthew Morris
Matthew Morris
answered on Aug 21, 2022

You can almost certainly get a copy directly (and anonymously) from the New York Attorney General's office website. Go to the AG's office's Charities Bureau online. (https://www.charitiesnys.com/home.html) Enter the name of the 501(c)(3) in the "Search Charities Registry"... View More

1 Answer | Asked in Employment Law and Business Law for New Mexico on
Q: Can a non profit (501 (c)) offer in a contract to pay a percentage of the profits, thanks
Matthew Morris
Matthew Morris
answered on Aug 9, 2022

It depends. Because you tagged this question with both "business" and "employment," I'm assuming that the profit-sharing contract you are asking about is a contract with an employee of the nonprofit organization. If so, you are dealing with a question involving a topic that... View More

1 Answer | Asked in Contracts, Real Estate Law, Business Law and Civil Litigation for Kansas on
Q: Can an 'adminstratively dissolved' non profit continue to make and enforce contracts?

Our HOA was administratively dissolved in 2009. We bought our home in 2020. The HOA has yet to reinstate their conpany and are trying to collect dues from us.

Matthew Morris
Matthew Morris
answered on Jul 24, 2022

A short answer is "no and yes."

Here's a longer answer: Any corporation in Kansas, including a nonprofit corporation, will generally lose their ability to engage in the purpose for which they were formed once they have been administratively dissolved. That's the...
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1 Answer | Asked in Contracts and Business Law for Maryland on
Q: Does a president of a condo association have the right to hire and fire employees without board approval?
Matthew Morris
Matthew Morris
answered on Jun 4, 2022

Like almost any good legal question, the answer is "it depends." Generally, an individual person can be given the ability to hire and fire employees without calling for a board vote. But a more specific answer is that you should look at your association's bylaws. Under Maryland law,... View More

1 Answer | Asked in Business Law, Copyright and Intellectual Property for Missouri on
Q: Former board member stole intellectual property. What can I do?

I am the founder and president of a non-profit organization, registered in Missouri since 2019. A former board member has stolen the intellectual property of the organization and is using the organization's name for personal use. They have removed my access to the domain name in the... View More

Matthew Morris
Matthew Morris
answered on Jun 4, 2022

The devil is going to be in the details on this, and there are probably dozens of follow-up questions that a nonprofit attorney (which I am) or an intellectual property attorney (which I am not) would ask you. But here are some thoughts.

This type of situation often arises when two or more...
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1 Answer | Asked in Business Law for Florida on
Q: If you run a non profit, can you sell items to help fund the organization?

For example, can a pet rescue sell dog bandanas and treats if the proceeds goes straight back into running the rescue (buying dog food or covering vet bills)?

Matthew Morris
Matthew Morris
answered on May 30, 2022

A short question that will probably never get you a short answer from a nonprofit lawyer. The IRS calls this "unrelated business income," and the rules about UBI can be pretty complex. Nonprofit lawyers and tax-exempt CPAs spend a lot of time trying to learn and navigate those rules.... View More

1 Answer | Asked in Business Law for California on
Q: If a NOP is set up for three years but have never filed with CA Attorney General but running its business. Legal or ill?

We would like to know if NpO has existed for three years ,but has not registered with AG for three years, but it has been taking donations and other activities (jot much formality or normal meeting records keeping as you may guessed) , we want to know the consequences if this not not registered... View More

Matthew Morris
Matthew Morris
answered on Apr 30, 2022

There are a lot of issues here. If this were to come into my office, we would probably spend a lot of time just talking about the facts and history before giving any advice. And the advice would depend on whether I am speaking to an officer, board member, donor, member of the public, etc.... View More

1 Answer | Asked in Business Law for California on
Q: How to file dissolution of NPO (ELEC NP) form in person

Hi. On the cover sheet of filing this election of wind up and dissolve, it stated that one can file in person with$15 handling fees. Where do you go to hand it in in person? The PO box is in Sacramento. Do we have an office of SOS in Ventura or LA for in person filing ?

Matthew Morris
Matthew Morris
answered on Apr 29, 2022

There is an office in Los Angeles, but the Secretary of State limits what items can be filed in person at that office. That office "distributes forms and informational materials" and will accept drop off of "corporation name reservation requests," "Articles of... View More

1 Answer | Asked in Business Formation and Tax Law for California on
Q: Public purpose vs Charitable Purpose

On the filing of article incorporation of a NPO, two purposes available for ticking : Public purpose and Charitable purpose. What’s the difference? Also If Public purpose is checked can the organization still get 501(c)(3) tax exempt status ?

Matthew Morris
Matthew Morris
answered on Apr 28, 2022

A good question. It's not helpful that courts in California have frequently used the terms "public purpose" and "charitable purpose" interchangeably.

Taking your last question first: the IRS will not likely deny a 501(c)(3) determination if you check the box for...
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1 Answer | Asked in Business Law and Business Formation for California on
Q: I want to open a non-profit for my theatre but I'm not sure how to handle the sublease income on a separate floor.

I lease a 2 story building for a live theatre. The theatre occupies the 1st floor. I want to create a theatre non-profit.

The building has a 2nd floor. It's not part of the theatre. Sometimes the second floor is occupied through a sub-lease which is allowed in my lease, sometimes it... View More

Matthew Morris
Matthew Morris
answered on Apr 21, 2022

This question raises many of the big issues that nonprofit attorneys work on. You definitely should talk to a local nonprofit lawyer because there are LOTS of issues lurking here.

Issue 1: Are you sure you should be a nonprofit? One thing that a lawyer for nonprofits will probably do here...
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1 Answer | Asked in Business Law for California on
Q: I a NPO voting member I cannot find the article of in coproduction of this NPO online. Is AoC written by the founder

In my other question Matthew has said to go back to article of incorporation (AOC). I am a member with voting rights. AOC is not posted on NPO website. I researched in state web site and I don’t see it. Where can I find it? Is it possible they never has AOC? Isnt AOC provided by the state when... View More

Matthew Morris
Matthew Morris
answered on Apr 20, 2022

Here are a couple ways to find a copy of the articles of incorporation. The most direct method is to demand to see them. Under California's nonprofit law, the organization is required to show them to you as a member. If there is a "principal office," they have to keep a copy at... View More

1 Answer | Asked in Business Law for California on
Q: A 501(c)(3) NPO with membership setup in April 2019. Till today there was no election of the board. Is the board legal?

Members requested the board to be elected and worked on writing up a bylaw on Mar 1, 2022. Board did no reply to election request. Then on Apr 5 out of blue published a bylaw, dated March 12, that will allow them stay in power forever. Is the board legal since they should have held election on... View More

Matthew Morris
Matthew Morris
answered on Apr 19, 2022

This is a complex question, and there are a lot of variables that might affect the answer that a nonprofit lawyer would give you after looking at this deeply. Let me talk through some of the issues that seem to be at play here, but there might be other issues that are not obvious from the limits... View More

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