Legal Question in Business Law in Illinois

Hello,

I would like to start a non-profit organization; does it have to be incorporated, or could it be registered in some other way? If the organization intends to function in other states, as well as outside of the US, is it enough to register it with the secretary of the state?

Thanks!

Asked on 12/18/12, 8:42 am

1 Answer from Attorneys

David K. Staub Staub Anderson LLC
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A non-profit does not have to be incorporated. A non-profit that does not incorporate is known as an unincorporated association. Unincorporated associations may even apply for 501(c)(3) status with the IRS and accept tax-deductible contributions.

However, you should be careful because the officers, directors and possibly even members of the unincorporated association may have personal liability exposure. Because incorporation of a non-profit is quick, easy and relatively inexpensive, any non-profit should seriously consider incorporating.

If the organization is going to function in more than one state, then it will generally need to file to be qualified as foreign non-profit corporation in each additional state and keep its registration current as long as it has a significant presence in that state.

Be careful, though, because states do have a variety of laws that regulate non-profits, particularly non-profits who are soliciting charitable funds in the state. Registering to do business in a state is often just one step in the required compliance.

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12/20/12, 4:02 pm

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