Important Developments in California Law Affecting Nonprofits

NEO Law Group’s Erin Bradrick and the California Franchise Tax Board’s Audrey Rowe provided an informative presentation on developments in California law affecting nonprofits at the 2017 WCTEO. Here are some of the highlights from their presentation.

Attorney General

  • Revised Guide for Charities released (Erin was one of the contributors).
  • Revised forms for both the initial registration (Form CT-1) and renewal registration (Form RRF-1) are expected very soon.
  • A new proposed Form CT-TR-1 (Treasurer’s Report) has been proposed for use by reporting organizations that file a Form 990-N and is expected to be made public by the end of 2017.
  • The Form RRF-1 may now be completed online for many organizations through the Charity Registration Online Renewal System (available at http://rct.doj.ca.gov/eGov/Login.aspx), but charities must be in current status and have a Renewal ID (which can be requested by e-mail  to [email protected]).
  • The new phone number for the Registry of Charitable Trusts is 916.210.6400.

Secretary of State

  • A more comprehensive business search online database (available at https://businesssearch.sos.ca.gov/) was launched in December 2016 and now provides free access to more than 10.9 million records related to corporations, limited liability companies, and limited partnerships.
  • The new BizFile California portal (available at http://www.sos.ca.gov/business-programs/bizfile/) was recently released and helps businesses file, search, and order business records (including Statements of Information).
  • New Form AMDT-NP-NA (available at http://bpd.cdn.sos.ca.gov/corp/pdf/amendments/corp-amdtnpna.pdf) was released in September 2016 and generally may be used for a corporation’s name change in lieu of a Certificate of Amendment to the Articles of Incorporation.

Franchise Tax Board

  • Automatic extensions for filing annual information returns (Form 199) reduced from 7 months to 6 months to conform to IRS deadlines. For tax years beginning on or after 1/1/16.
  • Form 3500A to be available for 501(c)(19) veterans organizations starting 1/1/18.
  • Voluntary dissolution Form 3502 – Request for Pre‐Dissolution Tax Abatement – available as of 1/1/16.
  • Relatively recent administrative dissolution procedures have been in effect for nonprofit corporations suspended and nonfiling for four years. Corporations will be sent 60-day notice letter before dissolution. Over 13,000 corporations have been administratively dissolved to date with an additional 7,500 notified and soon to be dissolved.
  • FTB receives about 1,000 exemption applications per month, about evenly split between Form 3500 and Form 3500A.
  • FTB revokes exemption from about 300 nonprofits per month (automatic revocation for failure to file FTB information returns, IRS automatic revocation with state exemption based on 3500A, failure to timely file with Secretary of State or Attorney General).