What is the difference between nonprofit and tax exempt status in San Diego? Does your nonprofit corporation or entity require a 501(c)(3) entity in order to fundraise or carry out your charitable or civic-related work?
The nonprofit advisory attorneys at the Watkins Firm work with organizations and entities who are committed to doing work for the purposes of “charity” “public benefit” “mutual benefit” or a “religious” cause. It is important to understand the difference between nonprofit and tax exempt status in San Diego and Southern California. A “nonprofit” or “nonprofit corporation” under California law refers simply to the structure of your organization’s entity. The use of the term “tax exempt” applies to those entities who have properly filed for and received tax exempt status from the State of California and the Internal Revenue Service (IRS).
It is important to understand the difference between these two phrases so that you may understand the nature of what you are trying to accomplish from a legal perspective and how to properly structure your organization. This is especially true if you intend to conduct fundraising activities of any substance or provide charitable contributions.
California’s laws regarding nonprofit corporations and charitable trusts are different than in most other states across the country. California law applies to all in-state and out-of-state entities if they own property or conduct business in California. Your nonprofit entity must register with the State of California within a very short time of when you initially receive a charitable donation or property which will be used for charitable purposes. The California requirement to register is actually activated by the receipt of property or money instead of initiating efforts to make charitable solicitations (as is the case in most other states).
Are you interested in learning more about the difference between nonprofit and tax exempt in San Diego and forming an entity to conduct charitable or public work? We invite you to contact the Watkins Firm or call 858-535-1511 for a free consultation.
