How do you create a non-profit in California?

You might also want to check the National Center of Charitable statistics to make sure that there are not already too many organizations that serve the same cause you have in mind for your non-profit. Indeed, states such as California already have a high number of charitable organizations and it is always better to make sure that there is room for yours.

The next step will be to decide which legal structure to adopt for your non-profit.  In California there are 3 main types of legal structures:

• Mutual benefit non-profits: Typically they are not tax exempt. They are usually created by groups of people to manage common interest developments such as homeowner’s associations.
• Public benefit non-profits: They almost always seek tax-exempt status in order to fulfill their charitable and public purpose.
• Religious non-profits: churches are considered non-profits and will be tax exempt.

Prior to drafting the articles of incorporation you should appoint the incorporators or initial directors. California law requires a minimum of one incorporator but it is recommended to appoint at least three if you are planning on filing for tax exemption with the IRS.

You also have to appoint an agent for services of process. The agent will be responsible for receiving service of lawsuits and possibly other important legal documents on behalf of the organization. The agent will make sure that those document are transmitted to the President or other authorized officer. If the agent fails in his duty it could result in negative consequences for the corporation.

The corporation will be legally created with the filing of the articles of incorporation. Keep also in mind that in California you have to register and file the Form CT-1 before your start fundraising.

The articles of incorporation should be drafted very carefully because their content will have a major impact on whether the IRS grants you the federal tax exemption or not.
Your articles of incorporation must state your organization’s name; the purpose or purposes of the organization; the name of the agent of service of process and his address; the business address and the mailing address of the corporation.

It is recommended to adopt a broad purpose statement that will allow the organization’s mission to evolve without requiring an amendment to the articles of incorporation. You especially have to make sure that the purpose meets the IRS requirements. Also, the articles of incorporation must include a statement saying that your non-profit will not engage in illegal political or legislative actions.
An incorporator usually signs the articles of incorporation or the initial board of directors you named in the articles.
You will then have to submit your articles to the California’s Secretary of State at http://www.sos.ca.gov.
There is an online filing option but it is actually cheaper to mail it. You will also have to file the Statement of Information (Form SI- 100) with the Secretary of State. It must be filed within 90 days of the date of the incorporation.

You also have to prepare bylaws for your corporation. The bylaws must comply with the California State Law and are basically the internal rules and procedures your corporation will follow including: holding meetings; electing officers and director and the duties of each other; and every other corporate formalities required by California.
Once you’ve drafted your bylaws you will have to hold a meeting with your board of directors during which you will: approve the bylaws; adopt a fiscal year; approve establishing a bank account; approve applying for Federal tax exemption; etc.
You will have to establish your company’s record and get a Federal Employer Id Number (EIN) even if you are not planning on hiring any employee.

How long does it take to get your CA non profit started? 
All together the process approximately lasts 4 to 6 months, unless your application contains some errors.

How much will it cost to start a non-profit?
Including all filing fees and depending on your planned income it will cost from $500 to $1000.