CA Secretary of State
As of January 1, 2021, filings with the Secretary of State by a domestic (CA) corporation or a foreign corporation that is qualified to transact business in California must include the entity name and entity number as they exist on the Secretary of State’s records. This includes such filings as Restated Articles of Incorporation and merger agreements that typically would not include the entity number prior to the change to the law (Corp. Code Sec. 5008(d)).
Processing times have dramatically increased as a result of the COVID-19 pandemic. Currently the Secretary of State is processing Articles of incorporation and Certificates of Amendment filed in person or by mail received on December 14, 2020 (about a 5 week timeline) and expedited processing has been indefinitely suspended. See Current Processing Dates.
Articles of incorporation of nonprofit public benefit corporations can now be e-filed using the Secretary of State’s pdf form. However, the form has some flaws, particularly for corporations with an educational purpose and also seeking property tax exemption and corporations that do not have only a charitable, educational, and/or religious 501(c)(3) purpose. See California Nonprofit Articles of Incorporation.
CA Franchise Tax Board
See our post from last month, California FTB Update for Nonprofits. Note that FTB Form 3500, Exemption Application, is currently available only upon request to the Franchise Tax Board (FTB), though an updated Form 3500 and Booklet with instructions is expected soon. FTB Form 3500A, Exemption Based on IRC Section 501(c)(3) Federal Determination Letter, is also currently unavailable on the FTB site. See also Charities and nonprofits for updates and to access these forms.
CA Attorney General
The California AG has begun enforcing the requirement that all of the 2020 updated forms be used. See Forms. After several weeks of being offline for maintenance, the AG’s Registry Verification Search, where one can find a nonprofit’s current registration status and prior registrations and registration renewals, is back! The AG website provides:
Potential donors [and presumably grantmakers] are encouraged to research organizations using this query tool and those available from the Secretary of State, Franchise Tax Board and IRS to determine an organization’s tax-exempt status and compliance status with all appropriate state and federal agencies. Each agency maintains their own database and independently determines the disposition of organizations relative to their statutory oversight. Each should be considered carefully and collectively to gain the most complete assessment possible. Donors may also benefit from reviewing our Resources and Donation Tips.
Last week, the Supreme Court of the United States agreed to take up the matter of California Attorney General’s donor disclosure requirement. See U.S. Supreme Court takes up dispute over California nonprofit donor disclosure requirement (Reuters).
IRS Form 1024-A
The IRS now requires for organizations seeking IRS recognition of exemption under Section 501(c)(4) of the Internal Revenue Code the electronic filing of revised Form 1024-A. See the IRS page About Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code and the Instructions for Form 1024-A. According to the IRS, the Service will provide “a 90-day grace period during which it will continue to accept paper versions of Form 1024-A (Rev. 01-2018); however, after April 5 the Form 1024-A must be submitted electronically.”