The Organizational Meeting…
Birthing Your Non-Profit Organization
The title of this article may seem strange to you. The fact is however that many people who have started a nonprofit or tax exempt organization over the years have never birthed the organization and are therefore still pregnant.
When you compare the arduous 501c3 or other non-profit start up process to carrying and bringing forth a beautiful baby that you believe will change the world, the comparison becomes clearer. Yes you can probably even relate to the pains of labor as you launch you big vision.
The problem is that many non-profit organizations never give birth because they fail to have what is known as their “organizational meeting”
What Is An Organizational Meeting?
The first order of business for most newly formed nonprofit corporations is to hold a meeting to approve standard items of business necessary for starting operations. This is usually referred to as the organizational meeting of the corporation. The meeting can be held by either the board of directors or the incorporators — whoever signed and filed the articles on behalf of the corporation.
The minutes of this meeting are simply a formal record of the proceedings and actions taken. Typically, these actions include such items as:
- setting an accounting period and tax year
- for a membership nonprofit, approving the issuance of memberships, membership certificates, and, if applicable, setting and scheduling membership dues or assessments
- authorizing and establishing the board and other committees
- appointing officers
- approving the bylaws
- authorizing the nonprofit to apply for tax-exempt status or, if that’s already been taken care of, stating the effective date and terms of the organization’s tax exemptions, and
- approving other beginning transactions of the corporation, such as the opening of a corporate bank account.
Some nonprofit corporations — especially those created in a rush — don’t have minutes of the first meeting of the board of directors or incorporators. It’s not the end of the world; you can proceed without them or recreate them. But if you recreate them after the fact, be sure to note in your recreated minutes that they were created after the fact to memorialize actions taken by your initial board or incorporators at their first meeting.
You must hold an organizational meeting to formally create the nonprofit corporation. At this meeting the bylaws should be adopted, the Board of Directors should be elected, and all other relevant business should be conducted.
Until that meeting happens, your newly formed 501c3 organization is still pregnant and carrying the baby.
You may be racking your brain right now trying to remember if your non-profit even has organizational minutes.
Many organizations do not have official minutes or do not know how important minutes are to their organizations protection.
In a related article I write about how a few “minutes” can prevent serious fines and sanctions and even keep members of your board out of jail. Yes, it is just that serious!
Official minutes and the organizational meeting
The significance of this critical meeting cannot be taken for granted. In the event of a legal proceeding, the minutes and record of this meeting would be one of the first documents a Judge would request to review. If there were no record of your initial organizational meeting, even if it happened, it didn’t happen.
The Judge would determine that your non-profit corporation is invalid, and the people and leaders would be deemed “uncovered”.
If the corporation is not valid the assets of the church or non profit, and any insurance monies would be subject to loss, and the personal assets of everyone in leadership would be at risk.
Also if any “Punitive damages” were awarded in a lawsuit, this would cause a significant financial burden to the organization until the damages were either paid it in full or the individual(s) expire(s).
If by some chance your organization is one of a large percentage of non-profits that do not have minutes and have not birthed their nonprofit with an organizational meeting, there is help available.
Act now and contact Providence Consulting Group for procedures on how to resolve the “organizational meeting” issue quickly and legally.
Isn’t it time to bring your non-profits baby to term and birth your organization.
For assistance creating Articles of Incorporation, By-Laws or recreating minutes from your “organizational meeting” contact, Providence Consulting Group, 1-800-406-1655 begin_of_the_skype_highlighting 1-800-406-1655 end_of_the_skype_highlighting begin_of_the_skype_highlighting 1-800-406-1655 end_of_the_skype_highlighting begin_of_the_skype_highlighting 1-800-406-1655 end_of_the_skype_highlighting begin_of_the_skype_highlighting 1-800-406-1655 end_of_the_skype_highlighting