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CALIFORNIA 501(a) NON-PROFIT TAX EXEMPT CORPORATIONS

$324.95
(INCLUDES CALIFORNIA STATE FILING FEES)
 
THANKS FOR INQUIRING!
 
Just think - you can incorporate
right over the Phone, or Online. It's easy. It's quick.
And you'll save a substantial amount of money.

Listen, we are glad you inquired about our services, because there's no reason for you to spend a ton of money to incorporate when you don't have to.

If you've priced the same identical services locally, you know that being there "in person" is costly. Very costly. Yet the services you receive are no better than those you can get from us directly on the phone or online.

We will form your corporation under the personal direction of a qualified attorney who makes certain that all requirements are met.

WHAT’S A NON-PROFIT CORPORATION?
A non-profit corporation is a business entity incorporated at the state level where there are no equity owners that hold shares of stock. Also, none of the corporate income is distributable to members, directors, or officers. Instead, such non-profit corporations typically are controlled by members that elect a board of directors.

WHAT’S 501(a) TAX EXEMPT QUALIFICATION AND RECOGNITION?
Besides the ubiquitous 501(c)(3) corporations, there are other types of non-charitable corporations that are exempt from federal income tax as well. These include civic leagues and social welfare organizations (which include local associations of employees, certain homeowners' associations, advocacy organizations, and junior chambers of commerce); labor, agricultural, and horticultural organizations, such as labor unions or organizations connected with raising livestock, forestry, harvesting crops, aquatic resources or the cultivation of useful or ornamental plants; business leagues or other organizations formed to promote the interests of a particular industry or industries, such as trade associations and chambers of commerce; social and recreation clubs, such as college fraternities or sororities, country clubs, garden clubs, hobby clubs, and college alumni associations; Fraternal beneficiary societies and fraternal organizations; and other nonprofit organizations such as voluntary employees' beneficiary associations; local benevolent life insurance associations; cemetery companies; credit unions and mutual financial organizations; supplemental unemployment benefit trusts; veterans organizations; black lung benefit trusts; title holding corporations for multiple parents; state- sponsored high-risk health coverage organizations; and state-sponsored worker's compensation reinsurance organizations.

WHAT ARE THE ADVANTAGES OF A TAX EXEMPT CORPORATION?
The biggest thing is that if your corporation is tax exempt, such organization would not be subject to federal income tax to the extent the money is generated and used in furtherance of the corporation’s tax exempt purpose. Furthermore, often if a corporation is exempt from federal tax, it is exempt from state income tax as well, as well as local property tax. Also, such an organization is exempt from excise tax on wagers, that is, a tax exempt corporation would not have a tax on a drawing or lottery conducted on its behalf. However, it should be noted that unlike with 501(c)(3) charitable corporations, donors may not be able to deduct donations made to such tax exempt corporations.

CIVIC LEAGUES AND SOCIAL WELFARE ORGANIZATIONS
To be tax-exempt as a social welfare organization, such organization must be non-profit and must be operated exclusively to promote social welfare. Also, the earnings of such organization may not inure to the benefit of any private shareholder or individual. To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). For example, an organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community and, therefore, does not qualify. Similarly, an organization formed to represent member-tenants of a specific apartment complex does not qualify, since its activities benefit the member-tenants and not all tenants in the community, while an organization formed to promote the legal rights of all tenants in a particular community may qualify as a social welfare organization. Seeking legislation germane to the organization's programs is a permissible means of attaining social welfare purposes. Thus, a social welfare organization may lobbying as its primary activity without jeopardizing its exempt status so long as such lobbying furthers its exempt purpose. The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. A social welfare organization may engage in some political activities, so long as that is not its primary activity. However, any expenditure it makes for political activities may be subject to tax.

A fairly common organization that falls under this category of tax exempt organization is the homeowners association, a membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development. This organization should demonstrate that it is operated for the benefit of all the residents of the community. The association should substantiate that areas such as roadways and park land the association owns and maintains are open to the general public and not just its own members, and that it does not engage in exterior maintenance of private homes.

Another organization that fits this category is a local employee association, which is an organization whose membership is limited to employees of a designated person or persons in a particular municipality, and whose net earnings will be devoted exclusively to charitable, educational, or recreational purposes. An organization is of a purely local character if its activities are confined to a particular community, place, or district, irrespective of political subdivision. A local association of employees that has established a system of paying retirement and/or death benefits to its members will not qualify for exemption. Similarly, a local association of employees that is operated primarily as a cooperative buying service for its members in order to obtain discount prices on merchandise, services, and activities does not qualify for exemption.


LABOR AGRICULTURAL AND HORTICULTURAL ORGANIZATIONS
A labor organization, such as a labor union, is an association of workers who have combined to protect and promote the interests of the members by bargaining collectively with their employers to secure better working conditions. A labor organization does not qualify for the exemption if it has no authority to represent members in job-related matters, even if it provides weekly income to its members in the event of a lawful strike by the members' union, in return for an annual payment by the member.

In order to demonstrate the organization meets the definition of a labor organization, the articles of organization or accompanying statements submitted with the exemption application should establish that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. In addition, no net earnings of the organization may benefit any member.

Agricultural and horticultural organizations are connected with raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits. Agricultural organizations may be quasi-public in character and are often designed to encourage the development of better agricultural and horticultural products through a system of awards, using income from entry fees, gate receipts, and donations to meet the necessary expenses of upkeep and operation. The primary purpose of exempt agricultural and horticultural organizations must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. Activities that show an agricultural or horticultural purpose include promoting cooperative agricultural, horticultural, and civic activities among rural residents by a state and county farm and home bureau; exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture; testing soil for members and nonmembers of the farm bureau on a cost basis for soil treatment education; guarding the purity of a specific breed of livestock; encouraging improvements in the production of fish on privately-owned fish farms; and negotiating with processors for the price to be paid to members for their crops.

BUSINESS LEAGUES
A business league, in general, is an association of persons having some common business interest to promote such common interest and not to engage in a regular profit-making business. Trade associations and professional associations are considered business leagues. Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. A board of trade often consists of persons engaged in similar lines of business. For example, a nonprofit organization formed to regulate the sale of a specified agricultural commodity to assure equal treatment of producers, warehouse workers, and buyers is a board of trade. Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. Common business interest activities include the promotion of higher business standards and better business methods and encouragement of uniformity and cooperation by a retail merchants association; public education concerning the use of credit; establishing uniform casualty rates and compilation of statistical information by an insurance rating bureau operated by casualty insurance companies; establishing and maintaining the integrity of a local commercial market; operating of a trade publication primarily intended to benefit an entire industry, and encouraging of the use of goods and services of an entire industry (such as a lawyer referral service whose main purpose is to introduce individuals to the use of the legal profession in the hope that they will enter into lawyer-client relationships on a paying basis as a result). An exempt organization may work for the enactment of laws to advance the common business interests of the organization's members. A taxpayer cannot deduct the part of dues or other payments to a business league, trade association, labor union, or similar organization that is for Influencing legislation; participating or intervening in a political campaign for, or against, any candidate for public office; trying to influence the general public, or part of the general public, with respect to elections, legislative matters, or referendums (also known as grassroots lobbying); communicating directly with certain executive branch officials to try to influence their official actions or positions.

SOCIAL AND RECREATION CLUBS
Typical organizations that should file for recognition of exemption as social clubs include college alumni associations; college fraternities or sororities operating chapter houses for students; country clubs, amateur hunting, fishing, tennis, swimming, and other sport clubs; dinner clubs that provide a meeting place, library, and dining room for members; hobby clubs; garden clubs, and variety clubs. An organization will not be recognized as tax exempt if its charter, bylaws, or other governing instrument, or any written policy statement provides for discrimination against any person on the basis of race, color, or religion. However, a club that in good faith limits its membership to the members of a particular religion to further the teachings or principles of that religion and not to exclude individuals of a particular race or color will not be considered as discriminating on the basis of religion. No part of the organization's net earnings may benefit any person having a personal and private interest in the activities of the organization. For purposes of this requirement, it is not necessary that net earnings be actually distributed. Even undistributed earnings can benefit members. Examples of this include a decrease in membership dues or an increase in the services the club provides to its members without a corresponding increase in dues or other fees paid for club support. However, fixed-fee payments to members who bring new members into the club are not an inurement of the club's net earnings, if the payments are reasonable compensation for performance of a necessary administrative service. The membership in a social club must be limited. In general, the club should be supported solely by membership fees, dues, and assessments.

FRATERNAL BENEFICIARY SOCIETIES AND DOMESTIC FRATERNAL SOCIETIES
There are two types of fraternal societies: beneficiary and domestic. The major distinction is that fraternal beneficiary societies provide for the payment of life, sick, accident, or other benefits to their members or their dependents, while domestic fraternal societies do not provide these benefits but rather devote their earnings to fraternal, religious, charitable, etc., purposes.

OTHER NON-PROFIT TAX EXEMPT ORGANIZATIONS
Other tax exempt organizations include voluntary employees' beneficiary associations where the organization is a voluntary association of employees that will provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose such organization cannot allow any of its earnings to benefit any private individual or shareholder except in the form of scheduled benefit payments. In order to meet the tax exempt requirements, the organization has to consist of individuals who are employees and have an employment-related common bond, which may include having a common employer (or affiliated employers) or labor union affiliation and having coverage under one or more collective bargaining agreements.

Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies may also be tax exempt, provided that they are, among other things, organized and operated on a mutual or cooperative basis. Such organizations are associations of persons and organizations, or both, banded together to provide themselves a mutually desirable service approximately at cost and on a mutual basis. To maintain the mutual characteristic of democratic ownership and control, they must be organized and operated so that their members have the right to choose the management, to receive services substantially at cost, to receive a return of any excess of payments over losses and expenses, and to share in any assets upon dissolution. The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. Upon dissolution, gains from the sale of appreciated assets must be distributed to all persons who were members during the period the assets were owned by the organization in proportion to the amount of business done during that period. The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. Membership of a mutual organization consists of those who join the organization to obtain its services, acquire an interest in its assets, and have a voice in its management. In a stock company, the stockholders are members. Membership may include distributors who furnish service to individual consumers. However, it does not include the individual consumers served by the distributor.

Burial and funeral benefit insurance organizations can apply for recognition of exemption as an organization similar to a benevolent life insurance company if it establishes that the benefits are paid in cash and if it is not engaged directly in the manufacture of funeral supplies or the performance of funeral services. An organization that provides its benefits in the form of supplies and service is not a life insurance company. Such an organization may seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life.

A nonprofit mutual cemetery company may seek recognition of exemption when it is owned and operated exclusively for the benefit of its lot owners who hold lots for bona fide burial purposes and not for purposes of resale. A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. The fact that a mutual cemetery company limits its membership to a particular class of individuals, such as members of a family, will not affect its status as mutual so long as all the other requirements are met. A nonprofit mutual cemetery company’s earnings are or will be used to pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium; to buy cemetery property; to create a fund that will provide a source of income for the perpetual care of the cemetery or a reasonable reserve for any ordinary or necessary purpose. No part of the net earnings of the organization may benefit any private shareholder or individual.

State chartered credit unions and other mutual financial organizations also may obtain recognition of exemption from federal income tax. The organization must show on its application that it is formed under a state credit union law, the state and date of incorporation, and that the state credit union law with respect to loans, investments, and dividends, if any, are being complied with.

Mutual financial organizations must show the state in which the organization is incorporated and the date of incorporation; the character of the organization; the purpose for which it was organized; its actual activities; the sources of its receipts and the disposition thereof; whether any of its income may be credited to surplus or may benefit any private shareholder or individual; whether the law relating to loans, investments, and dividends is being complied with; and, in general, all facts relating to its operations that affect its right to exemption. The organization must include detailed information showing either that the organization provides both reserve funds for and insurance of shares and deposits of its member financial organizations or that the organization provides reserve funds for shares or deposits of its members and 85% or more of the organization's income is from providing reserve funds and from investments.

A post or veteran’s organization of past or present members of the Armed Forces of the United States may obtain recognition of exemption from federal income tax. To qualify for recognition of exemption, the organization must be organized in the United States or any of its possessions, that at least 75% of the members are past or present members of the U.S. Armed Forces and that at least 97.5% of all members of the organization are past or present members of the U.S. Armed Forces, cadets (including only students in college or university ROTC programs or at armed services academies) or spouses, widows, or widowers of any of the aforementioned, and that no part of net earnings benefit any private shareholder or individual.

In addition to these requirements, a veterans' organization also must be operated exclusively to promote the social welfare of the community (that is, to promote in some way the common good and general welfare of the people of the community), to assist disabled and needy war veterans and members of the U.S. Armed Forces and their dependents and the widows and orphans of deceased veterans, to provide entertainment, care, and assistance to hospitalized veterans or members of the U.S. Armed Forces, to carry on programs to perpetuate the memory of deceased veterans and members of the Armed Forces and to comfort their survivors, to conduct programs for religious, charitable, scientific, literary, or educational purposes, to sponsor or participate in activities of a patriotic nature, to provide insurance benefits for its members or dependents of its members or both, and/or provide social and recreational activities for its members.

An auxiliary unit or society of veterans' organization may be eligible for recognition of exemption provided that the veterans' organization (parent organization) meets the certain requirements as described above. The auxiliary unit or society must also meet additional requirements that it is affiliated with, and organized in accordance with, the bylaws and regulations formulated by the parent organization, that at least 75% of its members are either past or present members of the U.S. Armed Forces, spouses of those members, or related to those members within two degrees of kinship (grandparent, brother, sister, and grandchild represent the most distant allowable relationship), that all of its members either are members of the parent organization, spouses of a member of the parent organization, or related to a member of such organization within two degrees of kinship, and that no part of its net earnings benefit any private shareholder or individual.

A title-holding corporation or trust for multiple parents may obtain recognition of exemption from federal income tax as an organization organized for the exclusive purpose of acquiring, holding title to, and collecting income from real property, and turning over the entire amount less expenses to member organizations exempt from income tax. Such organization may have up to 35 shareholders or beneficiaries. Organizations eligible to acquire or hold interests in this type of title-holding organization are qualified pension, profit-sharing, or stock bonus plans, governmental plans, governments and their agencies and instrumentalities, and charitable organizations. The organization must be either a corporation or a trust. Only one class of stock is permitted in the case of a corporation. In the case of a trust, only one class of beneficial interest is allowed. In general, the receipt of unrelated business income organization may be subject the organization to loss of exempt status since the organization cannot be exempt from taxation if it engages in any business other than that of holding title to real property and collecting the income from the property. However, exempt status generally may not be affected by the receipt of debt-financed income that is treated as unrelated business taxable income. Certain shareholders or beneficiaries are not subject to unrelated debt-financed income tax on their investments through the organization. These shareholders are generally schools, colleges, universities, or supporting organizations of such educational institutions.

TAX EXEMPT APPLICATION PROCESS AND 501(a) CORPORATE RECORDS COMPLIANCE
To obtain a favorable Federal Income Tax exemption determination from the Internal Revenue Service, your corporation must go through a lengthy (it may be about 6 to 9 months regularly, 3 to 4 months if expedited) and often cumbersome Internal Revenue Service approval process, during which time you will have to provide the Internal Revenue Service with copies of your Corporate Records and information regarding your Corporation’s activities. Your Articles of Incorporation, Corporate By-laws and other corporate documents must include the proper information to comply with Internal Revenue Service Regulations.

Also, typically states have statutes that address specific types of entities, such as credit unions and other financial organizations. If you select this service at the time of formation of your non profit corporation, we will draft your Articles of Incorporation, Corporate By-laws and other corporate documents for compliance with the requirements needed to meet the definition of a tax exempt corporation at the federal level as well as for the specific type of entity at the state level. Or, if you have an existing non profit corporation where the Articles of Incorporation and other documents do not meet the requirements, we can amend your Articles and draft the appropriate corporate documents. The fee to prepare a California Non Profit Corporation with the required provisions for federal tax exemption as well as state compliance is an additional $125 for one half hour of legal research and analysis at the Firm’s standard billing rate. Further research and analysis may be required, but it has been the Firm’s experience that extra fees may not be needed.

CALIFORNIA CHARITABLE TRUSTS REGISTRATION
You must register your corporation with the California Attorney General’s office in order to accept donations unless you are a religious or educational organization. We can initiate the paperwork for your State of California charitable trusts registration for only $75 at the time you form your corporation.

TAX EXEMPTION PROCESS
We can represent you in preparing and submitting the documentation whereby your non-profit corporation receives formal recognition of tax exemption from the Internal Revenue Service and receives a formal letter of determination from the Internal Revenue Service. We, at Spiegel & Utrera, P.A., are prepared to assist you in this tax exemption process in order to ensure you that all of the necessary documents are completed and submitted in compliance with IRS’ requirements.

The typical application process may take 6 to 9 months. The sooner the better, as it is easier for a new non-profit corporation with no financial history to get tax exemption than a pre-existing entity. The fee to represent you in the formal recognition process with the Internal Revenue Service is $1,500 (not inclusive of the IRS tax exempt application processing fee) if selected at the time of formation of your corporation, $1750 thereafter. Our services include assisting you in completing the documentation necessary for submission to the IRS as well as reasonable assistance in responding to requests for additional information. If other services are needed, additional fees may apply. It has been our experience that in most cases additional fees are not needed.

CONVENIENT INSTALLMENT PAYMENTS
Because of our Firm’s recognition of the cost and difficulty of raising money at an early stage of an organization, we offer the option that you pay the fee for our services in installments. The typical application process may take 6 to 9 months. The regular $1500 fee to represent you applying for formal recognition with the Internal Revenue Service when selected at the time of formation of your corporation can be paid in four installments of $425 (includes a $50 service and processing charge per installment) for a total of $1700. If the installment method is selected, final submission of application documents will not take place until payment in full is made and received. There will be no installment payment methods for the IRS tax exempt application processing fee.

The regular $1750 fee to represent you in applying for formal recognition with the Internal Revenue Service when selected after formation of your corporation can be paid in four installments of $487.50 (includes $50 service and processing charge per installment) for a total of $1950. The typical application process may take 6 to 9 months If the installment method is selected, final submission of application documents will not take place until payment in full is made and received. There will be no installment payment methods for the IRS tax exempt application processing fee.

EXPEDITED TAX EXEMPT STATUS APPLICATION
In anticipation of contributions, grants or other funding sources, many of our clients are eager to expedite the tax exemption application, as the typical application process may take 6 to 9 months. In order to request that the application be expedited, there has to be a compelling reason for such expedited treatment, such as a pending grant where the failure to secure the grant may have an adverse impact on the organization's ability to continue operations; the organization’s purpose is to provide disaster relief to victims of flood and hurricane; undue delay because of IRS workflow scheduling; or any other situation where the IRS deems expedited service to be warranted. Our Firm can assist you in expediting the process so that it may take half the normal processing time or less for a fee of $2750. If you select the installment payment method, two payments of $1425 (includes $50 service and processing charge per installment) may be made for a total of $2850. There will be no installment payment methods for the IRS tax exempt application processing fee. The expediting process is subject to IRS processing delays and approval.

MORE SERVICES FOR YOU

SUCCESS STARTS WITH PLANNING! LET SPIEGEL & UTRERA, P.A. HELP YOU GROW YOUR BUSINESS.

Spiegel & Utrera, P.A., is a full service law firm that can help you solve most of the problems associated with incorporating, before they happen. Here are solutions to most of your incorporating needs…

CHOOSING THE RIGHT CORPORATE NAME

Please note California is extremely rigid when it comes to new corporate names that are either identical or even similar to the name of an existing California corporation. Therefore, it is essential for your corporate name to be as unique as possible.

Here are the examples:

Example: RMK INC. The chances of this going through are virtually zero. Whereas RMK Construction Inc. has much more of a chance because the word construction makes it more descriptive, thereby adding uniqueness to the name.

Example: Green Tree Enterprises. There is no way this name will go through because it is too generic. Compare to Green Tree Entertainment-this name has more uniqueness.

Please note: In the above example the word Enterprises is considered a non-searchable word. Words such as services, ventures, enterprise, concepts, group etc. etc. are not considered searchable. You may use them in the name, however, they are not part of the name search.

If you do not wish to restrict your business by adding a trade description in you name, then make sure the name itself is unique.

Example: If you do not wish to restrict yourself by saying RMK Construction Inc., then instead of RMK Inc. you are going to be more creative like Robert's Magic Kingdom Inc.

MORE SERVICES & FEES

Spiegel & Utrera, P.A. General Counsel Club & Registered Agent Service

Let Spiegel & Utrera, P.A. help you grow your business.
Our firm has what we call the "General Counsel Club". Select this valuable service at the time of ordering your corporation and receive an additional one month Bonus – so that your first year of service will cover 13 months PLUS take a $50 discount, so you pay only $89.95 for the first 13 months of service. You get unlimited telephone consultations all year long on matters relating to legal and strategic business advice. Plus our firm will prepare the Notice and Minutes of your corporation’s Annual Meeting of Shareholders or Directors; our firm will comply with all statutes and applicable laws relating to your corporation’s Registered Agent & Registered Office; our firm will review all mandatory State corporation filing documents as required by the Secretary of State; our firm will act as your corporation's General Counsel; you will receive our firm’s newsletter, "Entrepreneur’s Alert®", which is published six times a year and provides valuable insight into running your business from a legal and business point of view.

Service Agreement
If your Corporation is a service business, you’ll need a Service Agreement.
The bedrock foundation of many service businesses is a customized written agreement entered into with its customers. Many franchises sold for tens of thousands of dollars are business formats revolving around a Service Agreement. The key with a Service Agreement is to make it work as a marketing tool offering the business services in the widest variety of formats to your customers. For example, a one-time use customer needs to be converted to a monthly, quarterly or annual type repeat customer. At Spiegel & Utrera we want to help you get, and keep, your customers while looking professional and at the same time maximizing each sale with a friendly service agreement. A Service Agreement is only $367.95 if ordered at the time of forming your corporation. We will prepare a draft of your Service Agreement and deliver the draft by fax or email to you for your review. Once you have had an opportunity to review the Service Agreement we will meet over the telephone to discuss the various aspects of the draft Service Agreement. Thereafter, Spiegel & Utrera will make changes to the Service Agreement to finalize it. Once the Service agreement has been finalized and delivered to you, you should take it to your printer to be printed and padded so it will always look professional and non-negotiable.

Mail Forwarding Service
If you have not set up your company office or you want your attorney to receive your company mail, you may use any Spiegel & Utrera, P.A. office address as your mailing address. Our mail forwarding service is only $15 per month. There is a six month minimum order. There is also an initial postage deposit of $25, additional postage/shipping, if any, will be billed separately. For our mail forwarding service terms and conditions, click here.

TAX RELATED

State and 501(a) Corporate Records Compliance Top of Page
Your Articles of Incorporation, Corporate By-laws and other corporate documents must include the proper information to comply with Internal Revenue Service Regulations. Also, typically states have statutes that address specific types of entities, such as credit unions and other financial organizations. If you select this service at the time of formation of your non profit corporation, we will draft your Articles of Incorporation, Corporate By-laws and other corporate documents for compliance with the requirements needed to meet the definition of a tax exempt corporation at the federal level as well as for the specific type of entity at the state level. Or, if you have an existing non profit corporation where the Articles of Incorporation and other documents do not meet the requirements, we can amend your Articles and draft the appropriate corporate documents. The fee to prepare a California Non Profit Corporation with the required provisions for federal tax exemption as well as state compliance is an additional $125 for one half hour of legal research and analysis at the Firm’s standard billing rate. Further research and analysis may be required, but it has been the Firm’s experience that extra fees may not be needed.

501(a) Application for Exemption with Internal Revenue Service
Once your corporation is registered with the State of California, the next step in obtaining 501(a) qualification is to file the IRS’ Application for Recognition of Exemption under Section 501(a) of the Internal Revenue Code. Section 501(a) status would provide your non profit corporation with the benefits of public recognition of tax exempt status, which is particularly beneficial for obtaining grants; exemption from certain Federal excise taxes; and even non profit mailing privileges. The application process to obtain this tax-exempt status can be a very complex and tedious one. Therefore, we strongly recommend you seek the assistance of a tax professional in order to avoid any likely problems or undue delays in obtaining this status. We, at Spiegel & Utrera, P.A., are prepared to assist you in this application process in order to ensure you that all of the necessary documents are completed and submitted in compliance with IRS’ requirements. The typical application process may take 6 to 9 months. The fee to represent you in applying for formal recognition with the Internal Revenue Service is $1,500 (not inclusive of the IRS tax exempt application processing fee) if selected at the time of formation of your corporation, $1750 thereafter. Our services include assisting you in completing the documentation necessary for submission to the IRS as well reasonable assistance in responding to requests for additional information. If other services are needed, additional fees will apply. It has been our experience that in most cases additional fees are not needed.

Convenient Installment Payments for Regular Processing Service
The typical application process may take 6 to 9 months. We offer the option that you pay the fee for our services in installments. The regular $1500 fee to represent you in applying for formal recognition with the Internal Revenue Service when selected at the time of formation of your corporation can be paid in four installments of $425 (includes a $50 service and processing charge per installment) for a total of $1700. If the installment method is selected, final submission of application documents to the IRS will not take place until payment in full is made and received. There will be no installment payment methods for the IRS tax exempt application processing fee.

The typical application process may take 6 to 9 months. The regular $1750 fee to represent you in applying for formal recognition with the Internal Revenue Service when selected after formation of your corporation can be paid in four installments of $487.50 (includes $50 service and processing charge per installment) for a total of $1950. If the installment method is selected, final submission of application documents to the IRS will not take place until payment in full is made and received. There will be no installment payment methods for the IRS tax exempt application processing fee.

Expedited Tax Exempt Status Application
In anticipation of contributions, grants or other funding sources, many of our clients are eager to expedite the tax exemption application, as the typical application process may take 6 to 9 months. In order to request that the application be expedited, there has to be a compelling reason for such expedited treatment, such as a pending grant where the failure to secure the grant may have an adverse impact on the organization's ability to continue operations; the organization’s purpose is to provide disaster relief to victims of flood and hurricane; undue delay because of IRS workflow scheduling; or any other situation where the IRS deems expedited service to be warranted. Our Firm can assist you in expediting the process so that it may take half the normal processing time or less for a fee of $2750.

Convenient Installment Payments for Expedited Processing Service
We offer the option that you pay the fee for our services in installments. If you select the installment payment method, two payments of $1425 (includes $50 service and processing charge per installment) may be made for a total of $2850. There will be no installment payment methods for the IRS tax exempt application processing fee. The expediting process is subject to IRS approval.

Non-Voting Members
Depending on the level of participation of the organizers of the non-profit corporation, you may wish to have non-profit corporation members that participate but refrain from voting. We’ll draft a special provision for your Articles of Incorporation. This item costs only an additional $74.95 if ordered at the time of Incorporation.

Federal Tax ID Number
The equivalent of a social security number for a Corporation. You will need it to operate your business and open a bank account for the Corporation. We can obtain this number for you and the advantage of allowing us to get it for your Corporation, is that we will deliver it with your Corporation for only $35 so you may Open your bank account immediately!

California New Hire Reporting
Federal law requires all California employers to report basic information about employees, who are newly hired, rehired, or who return to work after a separation of employment. You must submit a report for each newly hired employee. Failure to report new hires within 20 days of their hire date may result in civil penalties. There may be a $24 fine per each newly hired employee or, if the State determines there is a conspiracy between employer and employee not to report the penalty can be up to $500 per newly hired employee. We can provide you with a package of 6 New Hire Registration Forms for $35. The forms are customized with your Corporation’s information, and you may re-use them for each person you employ.

Charitable Trusts Registration
You must register your corporation with the California Attorney General’s office in order to accept donations unless you are a religious or educational organization. We can initiate the paperwork for your State of California charitable trusts registration for only $75 at the time you form your corporation.

California Unemployment Tax Account Number
This number is used to withhold California Unemployment Taxes from your Corporation's payroll. If you have any employees on the payroll, including yourself, you will need this account number. We can initiate the paperwork for this account number for you and deliver it with the corporation. The cost at the time of incorporating is only $35.

California Sales Tax Number
This account number allows you to buy goods for resale or export and not pay any State of California sales tax. We can initiate the paperwork for you to obtain this number. The fee to prepare the documents is $35 when included as part of your incorporation package.

California Statement of Information - Nonprofit Corporation
Every California nonprofit corporation shall file an initial Statement of Information with the State of California within 90 days after filing its original Articles of Incorporation. A nonprofit corporation is required to file this statement even though it may not be actively engaged in business at the time this statement is due. Failure to file this Statement of Information by the due date may result in the assessment of a $50 penalty. The fee to have Spiegel & Utrera, P.C. complete and file your nonprofit corporation's initial Statement of Information with the State of California is $100 if ordered along with the formation of the nonprofit corporation.

Corporate Franchise Tax Exemption Application -- Avoid the Annual $800 California Minimum Franchise Tax
In order to be exempt from paying Corporate Franchise Taxes in the State of California, Non Profit corporations must file an Exemption Application stating their not for profit business purpose and supplying the State with supporting documents regarding their non profit business activities. We can prepare the necessary documents during the incorporation process for only $250. Please note: Non Profit organizations that do not apply for exemption are subject to the same franchise taxes that are apply to regular corporations, which in California is a minimum Franchise Tax of $800 each year.

Indemnification Agreement and Covenant Not to Sue
We strongly recommend that you include special provisions in your Articles of Incorporation, which would provide vital protection requiring the Non-Profit Corporation to indemnify and hold harmless it's Directors and Officers from any actions they take on behalf of the organization. If a Director or Officer is ever sued for such actions, these provisions would require that the Non-Profit Corporation be held responsible and not that particular Director or Officer individually. This protection is especially important considering that without it a newly elected Director or Officer could be held liable for the decisions and actions carried out by the predecessors who once held the very same position. These important provisions and agreements cost only an additional $75 if ordered at the time of Incorporation.

Lenders Agreement & Promissory Note for Non Profit Corporation
Initially a non profit corporation needs a cash infusion. Additionally, the non profit corporation may require a continuing advance of funds for some time. How to get the money? A non profit corporation generally has two choices for obtaining additional money; (1) members of the non profit corporation or others make cash donations or contributions to the non profit corporation or (2) members or others lend money to the non profit corporation. Lending money to the non profit corporation is the preferred method to advance money to the non profit corporation because the lender is seen as a creditor of the non profit corporation. The lending of money to the non profit corporation is accomplished with a Lenders Agreement and a Promissory Note. Both of these instruments together provide an initial amount of a loan to the non profit corporation and also provide for future advances of money the lender may make to the non profit corporation. In the event of failure of the non profit corporation, the loan will be fully tax deductible by the lender as a bad debt. The fee for a Lenders Agreement & Promissory Note for your non profit corporation, if ordered at the time of incorporating, is $75.

Security Agreement for Non Profit Corporation
Once you have decided to use the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note, the next step is to collateralize the personal property assets of the company in favor of you, the lender with a Security Agreement. A Security Agreement is a contract between a lender and borrower. The Security Agreement gives the lender a security interest and the right to repossess personal property that a borrower has offered as collateral if a note is not paid per its agreed terms. This right is superior to all subsequent creditors provided the lien given by the Security Agreement is perfected. The Security Agreement available from Spiegel & Utrera, P.A. is complete and includes provisions relating to type of collateral being secured, address where collateral will be kept, executing further documents, events that shall constitute a default, assignment of secured collateral by holder, a listing of events that would constitute default by the borrower and the rights of the lender should the borrower default. Provided you have ordered the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note, the fee for the Security Agreement, if ordered at the time of incorporation, is an additional $75.

Perfecting the Lien Created by the Security Agreement - Uniform Commercial Code
Liens against personal property are perfected differently than liens on real property. The use of the phrase “personal property” does not mean property owned personally by the owner of a business. Instead, the term refers to all property used inside or outside of a business (with the exception of real property) including equipment, furniture, inventory, etc. To perfect a lien against personal property used in a business, strict adherence must be followed pursuant to the Uniform Commercial Code, documentation must be created, executed and filed with the appropriate government agencies. Once recorded, the Uniform Commercial Code makes a lien valid and serves as notice that the lien exists. Usually, the first recorded lien takes priority. Provided you have ordered the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note and the Spiegel & Utrera, P.A. Security Agreement, the documentation required to perfect the lien under the Uniform Commercial Code is $75, if ordered at the time of incorporation.

LEASE/AGREEMENT CONSULTATIONS
Avoid costly mistakes, always, always, always have any type of Contract/Lease or otherwise legally binding agreement reviewed by an Attorney BEFORE you sign it. We offer Consultations at our Los Angeles office and over the phone for $100. per half hour or a fraction thereof. For your convenience, you can fax us the documents that need to be reviewed and the attorney can advise you over the phone. Some of the topics you may wish to discuss include:
 
Real Estate Purchase Reviews: Review of purchase/sale agreements associated with the purchase of real property.
Business Purchase Review: Review of purchase/sale agreements associated with the purchase or sale of a business.
Commercial Lease Reviews: (including Business Spaces such as: Offices, Stores, Warehouses, and Commercial Lofts)
 
Our staff has many years of experience representing Tenants. Having your lease reviewed BEFORE you sign on the dotted line can save you thousands of dollars.

In our review we address issues such as:

• Rentable vs. Usable Space

• Reasonable Rental Rates

• Free Rent

• Best Length of Lease

• Options to Extend the Lease & Purchase the Premises

• Leasing contiguous space for expansion

• Assignment and Subletting

• Caps on Rent increases and expenses demanded by Landlords

• Repair Responsibilities

• Exclusivity of Tenant's Business

• Early Termination Rights

• Personal Guarantees, should you or should you not

• Renewal Terms

• Zoning Issues

• Landlord build out costs

• Change of Control of Tenant

• Signage Protection

TAX SAVING LEASE AGREEMENTS

Home Office Lease
Agreement detailing the leasing of office space by a homeowner or tenant with a corporation for use as the Corporation's principal place of business. The typical tax savings under this agreement can exceed $1,200. – per year. The Home Office Lease is only $150. when ordered with your Corporation, and as an added bonus to our clients, we draft the Lease in such a manner that it is automatically renewable.

Motor Vehicle Lease
If you use your vehicle for business purposes, it is usually much more advantageous to keep the vehicle in your name and lease the vehicle to the Corporation The typical tax savings under this type of arrangement ranges between $1,500. and $3,000. per tax year. We can prepare the lease for only $150. when ordered with your Corporation.

Office Equipment Lease
A lease which details the leasing of office equipment by a business. Once again, by leasing equipment to the Corporation, you create a legitimate business expense for the Corporation and a Tax Deduction. Typically, the tax savings under this type of arrangement can exceed $1,000 per tax year. The cost for an Office Equipment Lease is only $150. when ordered with your Corporation.
 
EMPLOYEES / INDEPENDENT CONTRACTORS
 
Employment Agreement
If you are using employees in your business, it is important to have a written Employment Agreement to document the conditions of Employment. An Employment Agreement can be very advantageous for a business and should be required for all employees, whether new or existing. It creates a clear understanding of the arrangement between the employee and the Corporation and provides protection for the business. The Employment Agreement also contains other important provisions:

• It spells out the terms of employment, such as the duties, responsibilities and compensation of the employee.

• It states that the employee will not compete against the Corporation for a specific period of time after leaving its employment.

• It prohibits the employee from disclosing any of the Corporation's business records, computer data, trade secrets, methods of operation, et cetera.

• It prevents the employee from soliciting customers or clients of the Corporation.

• It prevents an employee, after leaving the Corporation's employment, from soliciting the Corporation's employees to work elsewhere.

The Employment Agreement is prepared in such a way that you can use it over and over again to avoid additional costs in the future. By having this Employment Agreement, the Corporation is given substantial clout in preventing an employee from joining a competitor, or competing against the Corporation and disclosing business secrets to anyone. The Agreement may be re-used by the Corporation as it hires additional employees, the cost of the Employment Agreement is just $150.

Independent Contractor Agreement
There are many reasons for using Independent Contractors, however, simply verbally stating that a worker is an Independent Contractor is not enough according to the IRS. Certain criteria must be met. The IRS considers 11 factors in three specified areas: Behavioral Control, Financial Control and Type of Relationship. So, before you engage the services of an Independent Contractor, it is essential that you document that relationship with a written Independent Contractor's Agreement, otherwise the IRS could hold your Company and you personally liable for the Independent Contractor's Income Tax, Social Security, Medicare Tax and Federal Unemployment Tax, which should have been withheld. As a signatory on the check used to pay the Independent Contractor, you could be held personally liable for these taxes. The Independent Contractor’s Agreement also contains other important provisions:

• It spells out the duties, responsibilities and compensation of the Contractor.

• It states that the Contractor will not compete against the Company for a specific period of time after the project is completed.

• It prohibits the Contractor from disclosing any of the Company's business records, computer data, trade secrets, methods of operation, et cetera.

• It prevents the Contractor from soliciting customers or clients of the Company.

• It prevents the Contractor, after leaving the Company, from stealing the Company's employees.

For a detailed explanation of the Benefits of using Independent Contractors’ Agreements, including a breakdown of the 11 factors the IRS analyzes and Industry examples provided by the IRS, please refer to document 239 of this Free Faxback Service. We can provide an Independent Contractor's Agreement that covers all the legal requirements and many business advantages for your Company for only $150.

BOOKS BY LAWRENCE J. SPIEGEL

Detours and Contradictions
Want more out of your corporation? Then don’t miss Lawrence Spiegel’s, 223 page Detours and Contradictions. Use this book, and all your available resources, to begin the challenging yet fulfilling journey of entrepreneurship. As we’ll see... having a marketable idea is only the first step in a lengthy process. Along the way you’ll encounter numerous detours and contradictions, risks and rewards. The price of Detours and Contradictions is just $13.50 if you order when forming your corporation. PLUS there is no extra charge for shipping, handling and processing as your book will be shipped with your corporation. Also, as an added bonus, your copy of Detours and Contradictions will be personally autographed by Lawrence J. Spiegel.

Charlie's Entrepreneurial Journey
Building your business, or selecting the type of business to start, is easy when using Charlie’s Entrepreneurial Journey as a guide and applying Lawrence J. Spiegel’s thirty eight "Principles of Entrepreneurship" to your business. Spiegel’s latest book provides 416 pages of insight into the world of an aspiring entrepreneur named Charlie. Charlie’s journey leads him through topics never discussed in business books but essential to success. Topics include: costs associated with Acquiring a Customer, Urgency to Purchase, Saturation Advertising, Success Leaves Tracks and Repetitive Business. Spiegel’s "Principles of Entrepreneurship" cannot be found anywhere else. In fact, no one has ever exposed the business secrets Spiegel discloses. If you are seeking to spark your business you will find an EXPLOSION in this book. Order this book at the time of forming your corporation and you will get Charlie’s Entrepreneurial Journey for $19.50 which includes shipping, handling and processing, when ordered with the formation of your company. PLUS Lawrence J. Spiegel will personally autograph your copy of Charlie’s Entrepreneurial Journey.

SHIPPING INFORMATION
Corporate Packages generally weigh approximately 4 pounds and are available for Pick up at our office or may be shipped to you via (2-3 day) Regular Service for a charge of $17.95 or via Overnight Delivery for a charge of $30.95. Please note, shipping and handling charges outside California may vary.

SPEED OF SERVICE OPTIONS FOR NON-PROFIT CORPORATION

REDDI CORP
If you need a corporation immediately, we have many California corporations, both current year and aged, which are ready for delivery. This is the best option for clients who need a corporation within 2 business days. For more information and a complete list of  all our Reddi or Shelf corporations CLICK HERE or call our office at (888) 520-7800 for details.

2 BUSINESS DAY NON-PROFIT CORP
If you need your corporation formed urgently, for an additional $560, we can expedite the preparation of the corporate records and file your corporation within 24 hours. The State of California under this process guarantees the corporation will be filed and completed by their office within 24 hours. Once our office receives your filed documents we prepare the rest of your Corporate Records including your Corporate Seal, and ship to you in 2 business days. If you request this class of service, we will also fax your filed articles of incorporation to you on the 2nd business day of your order.

5 BUSINESS DAY NON-PROFIT CORP
If you need your corporation formed quickly, for an additional $460, we can expedite the preparation of the corporate records and file your corporation. Our office receives your filed documents we prepare the rest of your Corporate Records including your Corporate Seal, within 5 days of their filing and then ship to you in 5 business days. If you request this class of service, we will also fax your filed articles of incorporation to you on the 5th business day of your order.

REGULAR SERVICE NON-PROFIT CORP
The Corporate Package is complete and includes Certificate of Incorporation, By-Laws, Corporate Book, Corporate Seal, Preliminary Name Search, State Filing Fees, and Attorneys Fees. Any additional documents or agreements you may order will also be delivered with your Corporate Records book. We complete your paperwork the same day you place your order and speak with us. Then your documents are immediately sent to the State of California for filing. The State of California files the documents received from us according to their own work flow schedule. This process varies depending on the time of year but generally takes 2 to 4 weeks. So if you need your corporation sooner select one of our expedited services. If you need your corporation sooner, you have two choices, either a REDDI CORP or an EXPEDITED CORPORATION.

OTHER SERVICES: Please call for pricing and ordering.
 
Lease Review: Let an attorney check make sure you’re not stuck with a lousy lease.
Trademark: Protection of a name, symbol, or slogan used by a business.
Copyright: Protection of literary, dramatic, musical, or artistic works.
Director or Officer Employment Agreement: Protect your corporation with an employment agreement.
 
Corporations also available for immediate delivery, (ready to open the corporate bank account) from 2001, 2000, 1999, ’98, & ‘97. Spiegel & Utrera, P.A. also has Private Stock Offerings, Buy-Sell Agreements, Contracts, Registered Agent Services, Non-Profit Corporations, Articles of Religion, Limited Liability Companies, Limited Partnerships, Limited Partnership Agreements, Fictitious Name Registrations, Trademark Searches, Trademark Registration, Copyright Registrations, and More!