[Noisebridge-discuss] Question about 501(c)(3) status ....

[Rachel McConnell]

They are different.  501(c)(3) status is an IRS status indicating 
tax-exemption and the ability to accept donations that are then 
tax-exempt for the donor.  It is possible to be a CA Public Benefit 
Corporation, which is a type of corporation registered in California, 
but not have the IRS 501(c)(3) status.  Noisebridge was in this state 
for our first almost year of operation.  In a nutshell, the type of 
corporation is a state law issue, whereas federal tax exemption is a 
Federal law issue.  Related but different.

On 1/27/12 5:19 PM, Bruce Wolfe wrote:
> 501(c)(3) is a corporation under IRS law. 'CA Public Benefit
> Corporation' is the same classification under state corporations law.
> They each cannot be separated or differentiated.
>
> Bruce
>
> On Jan 27, 2012 3:59 PM, "David Rorex" <drorex at gmail.com
> <mailto:drorex at gmail.com>> wrote:
>
>     This doesn't have anything to do with 501(c)(3), it has to do with
>     being a corporation.
>
>     On Tue, Jan 17, 2012 at 10:02 PM, Bruce Wolfe
>     <brucewolfe.sf at gmail.com <mailto:brucewolfe.sf at gmail.com>> wrote:
>
>         Ultimately, it also provides necessary liability cover under the
>         shield of corporations law so that no one person can be sued
>         personally due to fault by the organization's action. This is
>         not to say, a person acting on their own accord of activities
>         not sanctioned by the organization would also be protected.
>         People taking action outside of approved activities of
>         Noisebridge Board of Directors or by the membership would be
>         liable and _not_ be protected.
>
>         Example: If the floor buckled and someone tripped, fell and hurt
>         themselves without any help, their insurance company or legal
>         action would be against the 501(c)(3), not anyone personally.
>
>         Example: If violence is prohibited by the board of directors,
>         and a member assaulted another person, the offender would/could
>         be arrested and sued personally. The 501(c)(3) may also be
>         enjoined if it can be proved that it was negligent in providing
>         ample security to prevent such an occurrence. But, this is can
>         be averted as in the case of an altercation in a shopping mall.
>         The establishment usually would not be sued if there was no
>         liability on the organization's part that contributed to the
>         incident.
>
>         Example: If a member was slighted by the 501(c)(3) in any way by
>         an approved policy, then the 501(c)(3) will bear the brunt.
>
>         Example: If a director(s) slighted a member(s) and the action
>         was sanctioned or approved by the board of directors and/or
>         membership, the board member can be liable personally. (Bylaws
>         or other policies may vary on the actions of directors and
>         simple members.)
>
>         For the last example, the organization should have insurance for
>         each of the board members. It usually is an extension of the
>         regular insurance applied at the time of purchasing the
>         insurance and updated annually. Board members may also be
>         required by insurance to undergo ethics training, sexual
>         harassment training, workplace safety, etc. I would suggest the
>         board of directors to review its insurance policy annually at
>         the time of passing a new budget or budget review or insurance
>         policy annual renewal.
>
>         I've had half dozen businesses in more than two states, been a
>         director on more than a dozen boards and currently serve on the
>         city's Sunshine Ordinance Task Force where we must undergo
>         various required legal trainings.
>
>         Bruce Wolfe
>
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