Best Nonprofit & Charitable Organizations Lawyers in North Dakota

About Nonprofit & Charitable Organizations Law in North Dakota, United States

Nonprofit and charitable organizations play a crucial role in serving communities across North Dakota. These entities are established for public benefit, such as charitable, educational, scientific, or religious purposes, and do not operate for profit-making. In North Dakota, nonprofits must comply with both state and federal regulations to obtain and maintain tax-exempt status, govern their operations, and fulfill their missions ethically and legally. The North Dakota Century Code provides the primary framework for incorporating nonprofits, while additional rules apply for charitable solicitation and governance. Understanding the legal landscape helps organizations thrive while upholding public trust.

Why You May Need a Lawyer

Legal assistance is vital for nonprofit leaders and founders to navigate North Dakota’s complex requirements. Common situations that may require legal help include:

• Forming a new nonprofit entity, including drafting articles of incorporation and bylaws
• Applying for state and federal tax-exempt status
• Advising on fundraising, charitable solicitations, and proper use of donations
• Ensuring compliance with reporting and governance requirements
• Mergers, dissolutions, or significant organizational changes
• Employment matters involving staff or volunteers
• Addressing conflicts of interest and disputes among board members
• Responding to state or IRS audits and investigations
• Protecting intellectual property, such as trademarks and copyrights
• Navigating relationships with other organizations or government agencies

A lawyer specializing in nonprofit law can streamline processes, reduce risk, and help organizations achieve their missions in compliance with the law.

Local Laws Overview

Nonprofit and charitable organizations in North Dakota must follow several key local laws and regulations:

• Formation and Incorporation: Organizations must file articles of incorporation with the North Dakota Secretary of State. The bylaws must outline governance structure, voting requirements, and organizational purpose.
• Registration and Reporting: Most nonprofits must file annual reports with the Secretary of State and maintain good standing. Charitable organizations soliciting donations may need to register under the North Dakota Charitable Solicitations Act.
• Tax Exemption: Nonprofits usually seek federal tax-exempt status under section 501(c)(3) of the Internal Revenue Code, and may also qualify for state tax exemptions. State tax exemption often requires a separate application process.
• Board Governance: The board of directors is collectively responsible for the organization’s management. State law sets rules on board composition, duties of care and loyalty, conflict of interest, and regular meetings.
• Fundraising and Solicitations: North Dakota law restricts deceptive practices, imposes recordkeeping requirements, and requires truthful representation of how donations will be used.
• Dissolution: If a nonprofit ceases operations, it must follow formal dissolution procedures, including distribution of assets in accordance with state and federal requirements.

It is important for organizations to stay current on these evolving requirements to avoid penalties and safeguard their reputations.

Frequently Asked Questions

What types of nonprofit corporations can be formed in North Dakota?

North Dakota allows formation of nonprofit corporations for charitable, educational, religious, and public-benefit purposes. Most nonprofits are organized under the Nonprofit Corporation Act, while some specialized types, like religious or mutual benefit organizations, may have additional rules.

How do I start a nonprofit in North Dakota?

To start a nonprofit, you must draft and file articles of incorporation with the Secretary of State, pay the required filing fee, and adopt bylaws. Additional steps include applying for federal and state tax-exempt status, obtaining necessary licenses, and preparing for ongoing compliance.

Do I need to register to solicit charitable donations in North Dakota?

Most organizations soliciting donations from the public in North Dakota must register with the Secretary of State under the Charitable Solicitations Act, unless exempt. Exemptions may apply to religious organizations, educational institutions, and other specific groups.

What annual filings are required for nonprofits in North Dakota?

Nonprofits must file an annual report with the Secretary of State. Federally tax-exempt organizations must also file annual IRS returns, such as Form 990. Additional filings may be required depending on fundraising activities and state tax status.

How is the board of directors for a North Dakota nonprofit structured?

State law requires at least three directors. The board is responsible for governance, financial oversight, and ensuring compliance with laws and bylaws. Board members must avoid conflicts of interest and act in the best interests of the organization.

Can a North Dakota nonprofit pay its directors or officers?

Board members can be paid for services rendered other than their board duties, but excessive compensation is not allowed. Officers may receive reasonable compensation for actual work performed, not for simply serving as a board member.

What are the most common compliance issues facing nonprofits in North Dakota?

Frequent issues include missing or late state and IRS filings, incomplete recordkeeping, unregistered fundraising, improper governance, and conflict of interest matters. Legal guidance helps prevent and address such problems.

Are donations to North Dakota nonprofits tax deductible?

Donations are generally tax deductible if the organization has 501(c)(3) tax-exempt status from the IRS and complies with related requirements. Donors should obtain written confirmation of their gift for tax purposes.

What should I do if my nonprofit is dissolving?

The organization must vote to dissolve, notify the Secretary of State, resolve debts, and distribute remaining assets according to state law and the organization's bylaws. Assets must generally be given to another tax-exempt entity.

Where can I find help if my nonprofit is facing an IRS or state audit?

Engage a lawyer or accountant experienced in nonprofit law. You may also reach out to local resources, such as the North Dakota Center for Nonprofits, for guidance and support during the audit process.

Additional Resources

Several organizations and government bodies provide information and assistance for nonprofit and charitable organizations in North Dakota:

• North Dakota Secretary of State - Business Services Division
• North Dakota Attorney General’s Office - Consumer Protection & Charitable Organizations Section
• IRS Exempt Organizations Division
• North Dakota Department of Revenue
• North Dakota Center for Nonprofits
• Pro Bono legal clinics and legal aid organizations serving the nonprofit sector

Consulting these resources can help you stay informed about compliance obligations and connect you with professionals experienced in nonprofit law.

Next Steps

If you need legal assistance with a nonprofit or charitable organization in North Dakota, consider the following steps:

• Gather all relevant documents, such as your articles of incorporation, bylaws, recent filings, and correspondence with regulators
• Identify your specific legal questions or concerns to share with your attorney
• Contact a lawyer or legal service with experience in nonprofit law in North Dakota
• Consult additional resources and engage with local nonprofit support networks for ongoing education and updates
• Plan for regular compliance checks and legal reviews to keep your organization running smoothly

Taking these steps will help ensure your nonprofit operates within the law, maximizes its impact, and avoids unwelcome surprises down the road.