Tuesday, 21 January 2014

Can a California non-profit (501 c 3) which is currently a membership organization stop being a membership organization?

Question

Can a California non-profit (501 c 3) which is currently a membership organization stop being a membership organization?



Answer

Yes, by making the appropriate amendments to the organizational documents. Unless the organizational documents are very unusual, it will require a vote of the membership as well.



Answer

Nonprofit corporations are not required to have members. The existence, status and rights of members, if any, are set forth in the nonprofit's articles of incorporation and/or bylaws. Any elimination of members would require amendment of said documents to remove references to members and membership. This could be difficult to achieve, but it is certainly possible. At the time the nonprofit was undertaking such a fundamental change, it should also take steps to verify that the changes wouldn't jeopardize its 501(c)(3) status, which is separately granted by the IRS and is not directly associated with the formation and existence of the nonprofit corporation under California state law.



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