Certificate of Incorporation
There are eight parts or “paragraphs” to the Certificate of Incorporation to be filed for a not-for-profit corporation in New York State. The most important information to know before attempting to fill out this form is:
- What is the name of the not-for-profit corporation going to be
- What is the purpose of establishing the corporation (this can be very brief)
- What type of not-for-profit corporation is it (charitable organization, social or recreational, trade or professional, etc.)
- Where the primary office of the corporation is going to be
- Who the “directors” of the not-for-profit corporation are, and finally
- Language that states what will happen to any corporation funds if you were to dissolute
In my case, I knew that I wanted the corporation to be entitled, The Tiny Professional, Inc. and I had already established a mission statement. I used the IRS website to verify that my corporation was indeed a charitable organization because according the Internal Revenue Manual (IRM), Part 7 Chapter 25 Section 3 Subsection 3.7, a charitable organization or trust must be set up for the benefit of an indefinite class of individuals, not for specific persons. A trust or corporation organized and operated for the benefit of specific individuals is not charitable. This specific definition was passed by the IRS on February 23, 1999. I designated my primary office to be my house, since I do not have an established office location yet. If a not-for-profit corporation has a physical location established, it would be in their best interest to have that location listed as their primary office.
The directors of the not-for-profit can be composed of anyone and many times are the first board members of that organization. I chose to have my brother and the attorney who helped put together all the documentation as the other two directors. Of course this also meant drafting, establishing and requiring both parties sign a Conflict of Interest Agreement as well. As a final point, “the strategic plan should also include something few bother to consider when entering a business – an exit plan” (Sweet, 2006, p. 62). A corporation can always fail, especially in the not-for-profit world when profits are rarely in existence. If you are a 501(c) (3) corporation, meaning that you are tax exempt, you must explain on your Certificate of Incorporation where any funds you might have at that time, would go if your corporation was to go out of business. There are rules and regulations that require organizational funding to go to other 501(c) (3) organizations. The funding cannot go to a family member, individual person or company who makes profits.
In the event that a not-for-profit corporation decides to change their name in the original State they filed in, for any reason, there is a different form you can file to do so.
First, to avoid confusion in the numbering of its certificate of incorporation, rather than re-naming the New Certificate of Incorporation the ‘Third Amended and Restated Certificate of Incorporation,’ the Corporation intends to simply name the New Certificate of Incorporation the ‘Amended and Restated Certificate of Incorporation’. (Murphy, 2012, p. 20858)
Again, this is only necessary if a person or corporation chooses to change the name of their original filed entity. I hope that you find this non-profit series informative and helpful. These excerpts are based off my Master’s Thesis paper that I wrote this Spring and felt passionate about sharing with others, in the hopes that this information might help another individual succeed in their start up endeavor.
Sooner than later,
The Tiny Professional
Murphy, E. M. (2012). Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Certificate of Incorporation of BATS Global Markets, Inc. Federal Register, 77(67), 20858-20859.
Sweet, K. (2006, March). Avoiding the Black Hole of Business Start-ups. USA Today Magazine. pp. 62-64.