California AG: Proposed Changes to Initial Registration for Charities

The Office of the Attorney General, Department of Justice (“DOJ”) of the State of California is proposing to amend certain regulations and Forms that will affect charities subject to registration in California. The Notice of Amendments to Regulations and related documents can be found here.

Any interested person, or his or her authorized representative, may submit written comments relevant to the proposed regulatory action to DOJ. The written comment period closes at 5:00 p.rn. on February 11 , 2019. We’ll share some of our comments in a future post.

Proposed Changes to the Initial Registration Form CT-1

The following items will now be required (in addition to the requirements included in the current Form CT-1):

  1. All DBAs and names the organization uses or has used
  2. All states in which the organization is doing business
  3. Information concerning any non-profit organization with which the organization shares revenue or governance, such as fiscal sponsorships and affiliations
  4. Circumstances of any denial, revocation or modification of Internal Revenue Service tax-exempt status
  5. Circumstances of any suspension or revocation of Franchise Tax Board tax- exempt status
  6. Circumstances of any suspension or revocation of corporate status by the Secretary of State
  7. Identification of any officers, directors, trustees or employees related by blood, marriage or adoption
  8. Information concerning any court or administrative proc.eedings involving the organization or any of its officers, directors or trustees regarding solicitations or registration
  9. Identification of any officers, directors, or trustees convicted of a crime involving misuse or misappropriation of funds

In addition, the Initial Registration Form will include a one-page privacy statement as required under California Civil Code Section 1798.17. Instructions to the Initial Registration Form further provide:

Please note that the Form CT-1 is a public document which will be posted on the Registry’s website. If you wish to maintain the confidentiality of any attachment to the Form CT-1, you must request that the attachment not be maintained in the Public File. 

The Instructions also note that if the organization is claiming exemption from registration as a hospital, educational institution, religious or mutual benefit corporation, it must submit the following:

  • Founding documents, such as certified Articles of Incorporation, Articles of Association, Bylaws, or Trust Instrument (include any amendments)
  • IRS Determination letter (if applicable)
  • IRS Form 1023 or 1024, application for tax exemption (if applicable)
  • For mutual benefit corporations, a detailed description of the organization’s funding activities. (i.e., does the organization solicit/receive contributions from the public and/or receive government grants in California to be used for charitable purposes or is the organization only funded by members). 

However, it’s unclear when such exempt organizations must make that submission if they are exempt from registration.

Submit Comments to:

James Toma, Supervising Deputy Attorney General
California Department of Justice
Charitable Trusts Section
300 S. Spring St., Suite 1702
Los Angeles, CA 90013

Teresa DePaz, Legal Secretary
California Department of Justice
Charitable Trusts Section
300 S. Spring St., Suite 1702
Los Angeles, CA 90013