Michigan business owners looking to form a non-profit corporation do well to abide by the laws of their state and federal government. Regulations for non-profits are designed to protect the public from fraudulent activities and to maintain transparency and accountability. The charitable nature of non-profit organizations mandates corporations to adhere to the highest legal and ethical business practices.
Business law requires filing Articles of Incorporation when forming any corporation. There are additional forms that must be filed to establish a non-profit organization. Different corporate agents must also be selected, and their roles must be clearly defined.
Establishing the corporate structure
When forming a non-profit corporation and assigning roles, it’s important to note that changes become increasingly challenging once the articles are filed and approved by the courts. It’s essential to agree with the corporate structure once designed.
It’s necessary to choose individuals who agree with the overall business plan, understand and accept their roles and responsibilities and abide by the organization’s laws and bylaws.
Setting the financial structure
Non-profits are funded through donations and financial contributions. Incorporating a leader with a background in funds management is a wise decision. The finances of any organization include managing profits and losses, taxes, payroll and investments. Business partners responsible for managing corporate finances must be transparent and able to perform with extreme oversight.
Financial reporting is critical to running a successful non-profit. Fiscal responsibility includes installing internal controls that are following all applicable business laws.
Accountability and transparency
Submitting all required documentation for a non-profit corporation is time-consuming. A careful and thorough review of each document, corporate structure, accounting method, and other vital elements with an objective eye is a wise practice that enhances financial stability and ensures success.