Practice Areas

Non-profit

Non-profit law governs the formation, operation, and dissolution of non-profit organizations, focusing on compliance with tax and reporting regulations while ensuring the organization’s mission serves a public benefit. These organizations must adhere to both federal and state laws, including specific requirements for tax-exempt status, governance structures, and operational activities.

Here’s a more detailed breakdown: 

1. Federal Law (IRS): 

Tax Exemption: Nonprofits seeking tax-exempt status under section 501(c)(3) of the Internal Revenue Code must demonstrate that their purpose and activities primarily benefit the public and not private interests. 

501(c)(3) Restrictions: Organizations must not engage in activities that substantially benefit private individuals or entities, nor may they participate in political campaigns or excessive lobbying. 

Excess Benefit Transactions: Transactions that result in an unfair benefit to individuals with substantial influence over the organization can trigger excise taxes.

Maintaining Tax-Exempt Status: Nonprofits must file annual information returns (e.g., Form 990) and adhere to specific rules regarding profit distribution and permissible activities. 

IRS Oversight: The IRS monitors and enforces compliance with federal tax laws, including the power to revoke tax-exempt status. 

2. State Law: 

Incorporation: Nonprofits are typically incorporated under state law, and many states have adopted the Revised Model Nonprofit Corporation Act or the Uniform Unincorporated Nonprofit Association Act. 

State Regulation: States also have their own regulations regarding nonprofit governance, reporting requirements, and charitable solicitations.

Minnesota Specifics: In Minnesota, nonprofit organizations are governed by the Minnesota Nonprofit Corporation Act (Minn. Stat. ch. 317A), according to the Minnesota Attorney General’s Office. 

Attorney General Oversight: In many states, including Minnesota, the Attorney General’s office has authority over charitable organizations, including the power to investigate and enforce compliance with state laws.

3. Operating Matters:

Bylaws: Nonprofit organizations must have bylaws that outline their internal operating rules, including governance structure, board member roles, and meeting procedures. 

Board Governance: The board of directors is responsible for ensuring the organization’s compliance with applicable laws and regulations, including proper record-keeping and reporting.

Financial Management: Nonprofits must maintain separate bank accounts, manage funds prudently, and ensure that all profits are used to support the organization’s mission. 

Transparency and Accountability: Transparency in financial management and governance is crucial for maintaining public trust and complying with legal requirements.

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802 DeMers Avenue
Grand Forks, ND 58201
Phone: (701) 775-4688
Email: lawfirm@ojs-law.com