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Articles of Incorporation are the primary rules for governing a corporation. Upon filing Articles of Incorporation with the Secretary of State (or Wisconsin Department of Financial Institutions), a corporation begins to exist as a separate legal entity from its founders. Bylaws govern the internal management of an organization and cover such topics as how directors are elected, how meetings will be run, what officers the organization will have and a description of the officers' duties.
An organization that is seeking to be recognized as exempt from income taxation must file either Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, or Form 1024, Application for Recognition of Exemption Under Section 501(a) for Determination Under Section 120 of the Internal Revenue Code. Most charities -- religious, educational, health care, or scientific organizations -- must use Form 1023. All other types of nonprofit organizations must use Form 1024. Both forms are lengthy, require organizational and financial information, and can be found on the IRS' website: www.irs.gov.
Directors and officers of a nonprofit organization owe certain fiduciary duties to the organization. A director or officer must act with the utmost care while providing service to the organization, must be loyal to the organization, must not profit from the organization, and must not place their needs above the needs of the organization.
Once created and recognized as tax-exempt by the IRS, a nonprofit organization must focus its efforts on its operations -- not unlike a for-profit corporation. Other legal issues that might need to be addressed include employment law matters, additional communications with the IRS and/or various other federal and state agencies, office lease and other contract reviews.
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