Ten (10) Ways Fractional General Counsel Can Help Your Nonprofit with Corporate Law and the Requirements of Tax Exemption by Attorney Rocky Cabagnot
In a previous blog, I detailed ‘What is Fractional General Counsel?’ In that blog, I detailed the definition of Fractional General Counsel, which is a means for your nonprofit organization to obtain custom sized legal services at an affordable price. With fractional general counsel, your nonprofit’s management team can add a general counsel (as an independent contractor) at a fixed monthly price that will fit within the nonprofit’s annual budget and provide incredible value to the organization.
In this blog, I spell out Ten (10) Ways Fractional General Counsel Can Help Your Nonprofit with Corporate Law and the Requirements of Tax Exemption:
- Deep Review of Your Corporate Records (including Bylaws) – Your nonprofit’s fractional general counsel will deeply review your corporate charter, trust instrument or association document. She will review all corporate resolutions and minutes. Further, she will examine and understand your agreements with member organizations and affiliates. If your nonprofit is a corporation (most are), your counsel with review your bylaws.
- Deep Review of your Board of Directors - Your nonprofit’s fractional general counsel will review your board of directors to determine whether the board has the requisite number of directors under applicable law or under the bylaws. She will also determine whether they have been duly appointed. Additionally, the fractional general counsel will determine whether the officer/leadership posts specified in the bylaws or state law have been filled and whether those persons are carrying out the duties prescribed. Based upon review of the bylaws, your fractional general counsel will ascertain whether the board membership consists of the number of representatives or designees of various interest groups, constituents, community groups, or affiliates, required by the bylaws. Further, your fractional general counsel will determine whether board members are under term limitations (and if so, ascertain whether the nonprofit has renewed or discharged the members whose terms have expired).
- Deep Review of your Tax-Exempt Related Paperwork – Your nonprofit’s fractional general counsel will review your tax-exempt application (Form 1023) and your tax-exempt determination letter, including any IRS letter rulings specific to your organization. Counsel will study your current mission statement(s) and activities and determine whether your organization’s activities are within the authorized scope of the Purposes clause of your organizing document and IRS determination letter. Your fractional general counsel will find out when the last time the board reviewed its mission and assist it in determining whether the IRS disclosure should be updated.
- Deep Review of your Fundraising Registration – Your nonprofit’s fractional general counsel will determine whether the nonprofit has registered with the appropriate state charities officials. Your fractional general counsel will also determine if your nonprofit has taken appropriate steps to fundraise in the various states where it is active.
- Deep Review of your Federal and State Informational Returns – Your fractional general counsel will determine whether your nonprofit is up-to-date with its filings of federal and state informational returns, and what role the Board or its committees play in reviewing documentation before filing. Counsel will review your Form 990 returns to ensure whether they are being filed regularly and if not, why not and how to correct.
- (For Charitable Trusts) Deep Review of How Many Trustees Meet the Definition of Independence Established by the IRS – Your fractional general counsel will review the trustees and ensure they meet independence requirements of the Internal Revenue Service.
- Deep Review of your Nonprofit’s Conflict of Interest Policies and Procedures – Your fractional general counsel will review your nonprofit’s conflict of interest policies, procedures, and questionnaires. She will determine who is responsible for enforcement and ascertain whether there are circumstances likely to give rise to concerns regarding private inurement of insiders.
- Deep Inquiry Concerning Private Benefits – Your fractional general counsel will inquire about transactions or relationships that may confer substantial private benefits, which are not allowed by the IRS. Any concerns will be reported to the Board of Directors.
- Ascertain Existence, Implementation, and Enforcement of Other Key Policies, in conformity with IRS Expectations – Your fractional general counsel will determine existence, implementation and enforcement of policies such as Document management (retention and destruction) policy, Whistleblower policy, Gift Acceptance Policy, and Joint Venture Policy.
- Ascertain if Your Nonprofit Has Obtained All Possible Tax Exemptions - Your fractional general counsel will determine if the organization has taken steps to become exempt from state taxes, property taxes and sales taxes.
Ten (10) Ways Fractional General Counsel Can Help Your Nonprofit with Corporate Law and the Requirements of Tax Exemption