CORPORATE RECORDS INSPECTION, Part 2: California Attorney General Registration and Renewal


If you think California is tough on businesses, take a look at California’s regulations of charities. In addition to extensive filing requirements at the time of formation, California charities are required to file annually and/or biennially with the Internal Revenue Service, Franchise Tax Board, California Attorney General and California Secretary of State. Other filings may also apply depending on the operations of the nonprofit organization. Of these filings, the most broadly misunderstood and overlooked filing requirement seems to be the California Attorney General charitable trust registration and annual renewal requirements.

Charities are required to register with the California Attorney General Registry of Charitable Trusts within six months after receiving assets. They must also file annual financial disclosure reports with the Registry. (Note that some charities are exempt from registration including religious organizations, government entities, educational institutions, hospitals, license health care service plans, regulated cemetery corporations, and political action committees.)

Although the California charitable trust registry has been in effect for many years, the filing requirements have slipped the notice of many charities, especially the smaller organizations run by volunteers. Volunteers tend to rotate through board positions in a relatively short time period giving them little time to learn about the requirements and pass along the information they gather. Further, because small charities often use the residential address of a board member as the business address, and the board members are constantly changing, it is difficult to keep a current address on file with the government offices. Thus, government notices are not likely to reach current board members. Finally, the volunteers prefer to focus on the charitable purpose of the organization, and they are reluctant to accept responsibility for government filings based on the well-founded fear that things may get complicated and time-consuming.

Whatever the reason for noncompliance, it is an unwelcome surprise to newly elected board members to discover that the organization is seriously delinquent and that bringing the organization into compliance will involve the labor-intensive task of digging through old financial and corporate records and preparing reports. My goal in this article is to provide step-by-step instructions to help officers and directors tackle the filing requirements efficiently and effectively.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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