OBTAINING NON-PROFIT & CORPORATE

OBTAINING NON-PROFIT & CORPORATE STATUS

a. Should your group be a corporation? Why or why not? Limited liability, perpetual life.

b. Does your group have a Federal 501(C)(3) tax exempt status?

c. What are the advantages? Federal and possibly state income tax exempt, no federal tax return required if gross revenue per annum is less than $25,000, donations to & personal expenses for non-profit are deductible, group qualifies for lower postal rates, and use of Federal, State, local government, and other non-profit organization facilities! A nonprofit organization is not prohibited from making a profit; the prohibition is against the distribution of any profits to the members, officers, or directors of the organization.

d. How do you incorporate your organization yourself? Florida Dept of State -Division of Corporations 800-435-7352 - http://www.sunbiz.org Obtain Not for Profit Articles of Incorporation - Filing fee $70. Instructions come with the forms. Anyone can complete them. You do not have to be an attorney! View FACUG Articles of Incorporation for example of how to complete them.

From User Group Connection? 408-461-5700 email: ugc@ugconnection.com. Contains all you will need including full example forms completed

e. IRS Exempt Organization information on the Internet

f. Have you obtained IRS Publication 557? - "Tax Exempt Status for Your Organization".

Call 800-829-3676 or go to http://www.irs.treas.gov

g. Have you obtained IRS Package 1023? - "Application for Recognition of Exemption".

Call 800-829-3676 or go to http://www.irs.treas.gov

h. Requirements: Not for profit, Educational, Public, activities benefit community, cannot be political.

i. Articles of Incorporation & by-laws must limit group to one or more tax exempt purposes, must state that upon dissolution, all assets will be distributed to exempt organization, government or for a public purpose. When completing articles of incorporation ONLY include what you must, and refer all other items to the Bylaws. You will not have to file amendments to make every change later. See example of FACUG Articles to be posted on our Web site soon. Whenever possible include the IRS wording from publication 557 in your Articles and By-laws. See FACUG Articles of Incorporation for an example.

j. What does it cost to apply to IRS? $150 if annual revenues are less than $10,000, otherwise $465.

k. What is required in application? Federal Tax ID# or application for ID applied for and pending, copy of Articles of Incorporation with Amendments, copy of Bylaws, three years financial statements or projections, and answer questionnaire. If you recently incorporated a prior entity, you must provide projections. The prior entity is not considered the same as the corporation. When you are approved based on projections you receive provisional 501(C)3 status for five years ,and are then reviewed for full status.

l. How long does it take? It has taken from 45 days to 6 months.