[clue] 2nd attempt to send 501c3 message, response to Gus

[M Paul Webb]

Here is that e-mail I tried to send out before -- just some preliminary considerations, as I noted 501c3 will be a topic of discussion at an up coming meeting.

Gus,
First, I think the group on the whole has to decide if they want to be a 501c3. It seems your objective is, with a 501c3, larger amounts will be donated, because they will be a tax deduction. Is that correct?

If you file in Colorado as a 501c3, then you are a non-profit corp. but you will not have formal IRS recognition. Filing that document is a pain. However, the formal recognition status is only to ensure that someone is not using the 501c3 as a tax dodge. It is extremely unlikely that you need the formal recognition -- as the amounts involved are too insignificant. 

However, if you intend to have paid employees, then you have to pay unemployment and social security taxes, and if you do not, the penalties are severe. So... you do not want to have employees. Paying someone as an independent contractor is something different.

If you actually read the Colorado Corporation Act, you can find conditions which could anticipate weird things with a good imagination, if you do not attach by-laws. I have notes on all the stuff I thought was weird somewhere. 

Your main responsibility is to list someone with the state as a legal agent, who can receive service for a law suit. It has to be verified once a year, and that costs $10 if done on line. The state just changed notice procedures for the form, and it is all done on line; so you have to get on the reminder list. You have to keep minutes of meetings and accounting. If the corporation is dissolved, you have to file a form showing no one personally benefited -- and that is where the accounting figures come in. 

I actually set up by-laws, and that included standard IRS language -- what makes them happy. 

At any rate -- NoLo press has a good book on setting up corporations. NoLo is expensive, but I got it at the library. Then, I read the Corporation Act, as it was at the library too, and I had to be more serious about things. But it was all a long time ago, so I would really have to review papers and refresh my memory. 

So... but I am extremely busy, and there just is not much I can contribute. But I might be able to get you pointed in the right direction. However, keep in mind that I am not a lawyer... but the law always gets involved in everything, so I pick some things up.

Paul


_______________________________________________
clue mailing list: clue at cluedenver.org
For information, account preferences, or to unsubscribe see:
http://cluedenver.org/mailman/listinfo/clue
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://cluedenver.org/pipermail/clue/attachments/20120127/baff0c3e/attachment-0001.html