The first step to starting a New York nonprofit is often to incorporate, or form, a New York nonprofit corporation. This is achieved under the New York Not-for-Profit Corporation Law. Most 501c3 and other 501c tax-exempt organizations, charities and NGOs, operating under New York rules, can begin here.
A New York nonprofit may also be established as an unincorporated association or a trust. However, the nonprofit corporation’s ability to protect its directors, officers, members and other insiders, from personal liability, is unparalleled. Compared to other nonprofit organization types, the nonprofit corporation will provide more peace of mind. This means more focus on the mission, and less worry about personal liability. This is why we normally recommend forming a New York nonprofit corporation over other types of nonprofit organization.
An unincorporated association can be treated as the same as its insiders under the law. Thus, the liabilities and legal obligations incurred by the nonprofit risk also being attributed to you. If someone gets injured in a nonprofit activity, you could be stuck footing the bill.
Trustees of a trust (the trust version of directors) incur personal liabilities to third parties in administering the trust. This is true even if the liability is incurred in pursuit of the nonprofit’s mission. If the nonprofit owes a payment that it cannot pay, the payment may have to come from your pocket.
A New York nonprofit corporation is legally treated as separate from its insiders. As long as it is properly operated, its liabilities and obligations will not flow to you. Further, the New York Not-for-Profit corporation law provides additional liability protections for volunteers and other uncompensated insiders.
The last thing that anyone wants is personal liability in the event of unexpected or unfortunate circumstances. When you form a New York nonprofit corporation, it can serve as a bulwark against such liability. This will leave you with more confidence to pursue your vision.
New York Nonprofit Corporation Incorporation Package
Package includes the following:
- Draft of the certificate of incorporation to form New York nonprofit corporation, in compliance with New York nonprofit law and federal tax law.
- File the certificate of incorporation with the New York Department of State, Division of Corporations.
- Provide basic non-member nonprofit corporate bylaws, in compliance with New York nonprofit law, federal tax law, and nonprofit best practices.
- Provide basic nonprofit conflicts-of-interests policy, in compliance with federal tax law safe-harbors.
- Prepare initial resolutions of directors.
- Apply for Employer Identification Number (EIN), if requested.
Legal Fee*: starting at $1,688
*Legal fee is an estimate representing what we normally charge clients to form a standard New York not-for-profit corporation from start to finish. If a more complex institutional structure is required, or special provisions such as anti-takeover measures need to be made, fees may be higher. We are usually able to offer this service for a flat-fee once we’ve had the opportunity to discuss with you your vision for the nonprofit. Quote does not include state fees, which as of January 2018, are between $85 and $125.