Do you have an idea that you are passionate about to help your community, and you want to ensure that it is set up properly to grow and carry out its mission?  Maybe you have stepped into a leadership role in a nonprofit, and you start to realize that maybe things were not set up properly.  Or perhaps you are part of an organization that has been operating informally for many years.  The leadership team decides that it wants to put in place a structure that will allow it to continue into the future, and to take advantage of the liability protections of being a corporation.  Maybe you have already formed a nonprofit, but you need assistance in navigating the process of having the IRS recognize it as tax-exempt.  

  • Decide on the proper legal structure of the nonprofit:
    • Will it be a nonprofit corporation, trust, or unincorporated association?
    • Determine whether it should be organized as a membership or directorship corporation under the Michigan Nonprofit Corporation Act.
    • If the organization is to be a corporation, determine whether it should be a stock or nonstock nonprofit corporation.  Michigan is one of the few states that allow for nonprofit corporations to have stock.
    • Decide on who should be the official leaders of the organization (directors, officers, or trustees in the case of a trust), and follow the proper steps to ensure that they are duly appointed and can act on the organization’s behalf.
  • Draft the legal documents to create the new organization and file them with the State of Michigan (if filing is required).
    • If the organization’s leader plan to see tax-exempt status for it, ensure that the organizational documents position the organization to do so. 
    • Make sure that the organizational documents take full advantage of the volunteer protection provisions available under the Michigan Nonprofit Corporation Act.
    • Craft bylaws for the organization that are consistent with its basis of organization (directorship or membership), and that will allow it to operate smoothly and efficiently, and in compliance with Michigan law.
  • Obtain a tax identification number for the organization from the Internal Revenue Service.
  • If the organization will seek one or more tax exemptions, select the applications to file, prepare them, and file them with the appropriate jurisdiction (IRS, State of Michigan).
  • Register the organization with the Michigan Attorney General’s office, or obtain an exemption from registration.
  • Register the organization with the Michigan Attorney General’s office, or obtain an exemption from registration.

A nonprofit can be structured as a nonprofit corporation, a trust, or an unincorporated association.  You need to ensure that your nonprofit has the most appropriate legal structure for your goals.  You need to know how to properly form the organization under Michigan law, taking advantage of protections for volunteers, and positioning the organization to achieve your goals.  You need to ensure that you comply with federal and Michigan laws.  Taylor Legal has assisted countless organizations through this process and put them on a firm legal footing as they move forward.

Many attorneys occasionally work with nonprofits, but few have the depth of experience that attorney Cevin Taylor has in this area of law.  An organization needs to be properly structured and positioned for what its leaders hope to achieve in the future.  For example, if it will own real property for which exemption from real property taxes will be sought, the wording of its organizational documents (articles of incorporation, trust instrument, bylaws) will be key.  If it plans to seek exemption from federal income tax, then it must be structured correctly and  positioned to seek tax exemption.