How To Avoid Common Compliance Issues With Your Non-Profit

Your governing documents are an important part of your non-profit compliance. You might decide to change your mission or purpose, but forget to update your governing documents in the process. However, if you work with a lawyer who specializes in nonprofit compliance, you will be able to make sure that your documents are updated.

Don't Let Your Bylaws Get Out of Date

There are several ways in which your bylaws can become outdated. For example, there might have been a bylaw that stated that the reorganization should dissolve by a specific date, but the organization then changed its mission and the director decided that they would adopt a new mission. Under these circumstances, you will want to make sure that a lawyer looks over your bylaws to make sure that there are not any issues of concern.

Review Your Bylaws Regularly

You should review the bylaws regularly to make sure that you have not missed any sections that might need to be updated. Bylaws should also be inspected before you hire a new director or officer. Each time you create a new committee, you will need to update your bylaws. 

Make Sure That All Governing Documents are Up-To-Date

All governing documents must be in compliance with state and federal laws. Therefore, while your board might create an initial draft of your bylaws, they must always be inspected and revised by a nonprofit compliance lawyer to make sure that you will not run into any legal hurdles in the future.

Report In-Kind Contributions Accurately

To remain in compliance, you will need to meet various accounting requirements. You will need to record all of your transactions in the right period. In-kind contributions must always be reported in a manner that is accurate. For example, you must record the value of services provided to the non-profit using the fair market value for those services. 

Classify Your Employees Correctly

Another compliance issue is the classification of workers. Individuals who do work for an organization can be viewed as employees or independent contractors. This is based on the relationship that the individual has to the organization and the level of control that the organization has over how the employee performs their job.

The classification of the employee is necessary because certain taxes might need to be withheld depending on how the employee is classified. It's easy to overlook certain legal requirements, but lawyers are trained on how to identify and solve your legal problems.   

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