Legal Question in Business Law in California

Starting and Running a Very Very Very Small Non-profit

My friends (4) and I run website based organization dedicated to bringing support to travelers. We run all our operations on the internet, and the closest thing we have to an office is my living room.

The website/organization will bring in about $200-$4,000 annually, through paypal donations, internet corporate affiliate programs, and non-pop-up advertising.

Financially, my friends and I spend our own money to keep everything running, and use the donations/affiliates/ad money to reimburse our-self for the money we spend.

Here is my questions:

1.Do I need to register my organization (if you could call it that) with the state to call myself an non-profit, informal non-profit or not for profit organization and would doing so on the website be considered illegal since we are not--name removed--registered non-profit?

2.Could I accept donations and then put the money into my own bank account to reimburse myself without any special reporting to the government (assuming I report the earning as income)?

3.How much money could the website bring in before I would be forced to register it with the IRS and state?


Asked on 5/21/03, 8:48 pm

1 Answer from Attorneys
Sheldon G. Bardach Law Offices of Sheldon G. Bardach

Re: Starting and Running a Very Very Very Small Non-profit

You cannot hold yourselves out as a charitable organization until you qualify with the IRS, under the provisions of the Internal Revenue Code. Further, solicitation of contributions is generally a matter for the local government in which the solicitation occurs. This is a tricky area of the law, and should be very carefully approached.

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Answered on 5/22/03, 7:50 pm


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