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Questions Answered by Matthew Morris
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... Read 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... Read 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... Read 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"... Read 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... Read 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,... Read 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... Read 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.... Read 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... Read 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.... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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... Read more »

1 Answer | Asked in Business Law and Contracts for Indiana on
Q: I run a small business where i i use free fonts online for designs. While i was downloading a font today the file opened

Saying if using for commercial purposes you must buy license for use while it’s on a free platform and can be downloaded for free, my question is do i actually have to since this is a free font on a free platform or will i still be required to buy the license?

Matthew Morris
Matthew Morris
answered on Apr 16, 2022

The fact that a font is available for free online for some purposes does not mean that you can download and use it for free for other purposes. Fonts are considered to be a type of software. Just like other types of software, the person who programmed it can distribute it with license terms,... Read more »

1 Answer | Asked in Business Law for Ohio on
Q: If I have an LLC and I want to start a clothing brand. Does my brand logo have to be the same name as the LLC
Matthew Morris
Matthew Morris
answered on Apr 8, 2022

No, not unless you want it to be.

Your LLC is a company, and it can have (pretty much) any name you want it to have. I say "pretty much" because your company has to have a name that is different enough from other companies that it will not cause confusion. Your brand name and...
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1 Answer | Asked in Business Formation and Business Law for Texas on
Q: I am interested in starting a non profit fan site / fan group. What is the best 501 option?

I would prefer for it to be some type of corporation.

I saw this list: https://www.rocketlawyer.com/business-and-contracts/starting-a-business/non-profit-incorporation/legal-guide/types-of-non-profits

501(c)(7) doesnt really fit because we would not be limited to membership.... Read more »

Matthew Morris
Matthew Morris
answered on Apr 5, 2022

Most lawyers who offer advice on a question like this will ask a lot of questions to dig deeper into the details before offering advice. I have about fifteen that I go through when somebody is asking for advice on whether to form a nonprofit.

First, some background to be sure we are on the...
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1 Answer | Asked in Business Law and Real Estate Law for Indiana on
Q: Can a seller put a high interest rate on land contract when he has a letter from Egg company guaranteeing the payment

A private company financed me to purchase a farm. They put a high interest rate on it because they put up all the money and took all the risk. But the egg company I'm contracted with gave them a written guarantee that they would pay the mortgage no mater if my farm was making enough money to... Read more »

Matthew Morris
Matthew Morris
answered on Mar 27, 2022

There are a few things that jump out at me from your question. The first is that you ask two things. One question is "can a seller put a high interest rate on a land contract" and the other is "is that fair...?" Those are two different questions, and the answer to one might be... Read more »

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