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Unincorporated nonprofit association
An unincorporated nonprofit association is a type of informal collaboration that brings together individual stakeholders to achieve a common goal. These groups may be subject to certain state-level rules and regulations, but they are not required to file for 501(c)(3) nonprofit status with the Internal Revenue Service (IRS) unless their earnings exceed $5,000.
Purpose and structure
An unincorporated nonprofit association is a group of stakeholders who work together toward a specific goal. As a nonprofit entity, the association does not distribute its income to any unique individuals such as members, administrators, or directors. An association is not required to file formal articles of incorporation or bylaws, but the group must file for 501(c)(3) status with the Internal Revenue Service (IRS) if its earnings exceed $5,000.[1][2]
Despite the informal structure of unincorporated nonprofit associations, a number of states formally recognize these groups and have specific rules for their administration. For example, Texas and Wisconsin require at least three members to form an association while North Carolina requires only two members. States such as California and Wisconsin view associations as separate legal entities, which allows members to gain certain liability protections. Other states, such as Kentucky, require formal filings with the secretary of state in order to obtain limited liability. Certain states also have rules regarding the acquisition and transfer of real property by an association.[2][3][4][5]
Unincorporated nonprofit associations generally have more operational freedom than nonprofit corporations. Unlike nonprofit corporations, associations are not required to file articles of incorporation or bylaws, though other formal records may be required in some states. Moreover, these groups do not have to maintain a board of directors or hold mandated meetings. However, nonprofit corporations have limited liability protections that have not been extended to associations in every state.[1][5]
See also
External links
- Section 501 of the IRS code
- Texas statute for unincorporated nonprofit associations
- Wisconsin statute for unincorporated nonprofit associations
Footnotes
- ↑ 1.0 1.1 NOLO.com, "What is An Unincorporated Nonprofit Association?" accessed January 15, 2016
- ↑ 2.0 2.1 North Carolina Secretary of State, "Unincorporated Nonprofit Association Act, Frequently Asked Questions," accessed January 21, 2016
- ↑ Wisconsin State Legislature, "Chapter 184, Uniform Unincorporated Nonprofit Association Act," accessed January 21, 2016
- ↑ Stoll, Keenon, Ogden PLLC, "Kentucky Enacts the Unincorporated Nonprofit Association Act," accessed January 21, 2016
- ↑ 5.0 5.1 Notations on Nonprofits, "Unincorporated nonprofit association: what it is, the benefits and the disadvantages," December 15, 2012
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