Tuesday, January 10, 2012

Learn about how revisions to the DC nonprofit code affect your organization

Regina Hopkins, Assistant Director for Community Economic Development at the DC Bar recently shared the following information.

Information about DC code changes
The District of Columbia requires every nonprofit corporation which operates in D.C. to register with the D.C. government, either when it incorporates or, in the case of a nonprofit incorporated elsewhere, when it first begins operations in D.C. Thereafter, the nonprofit must file a report with the D.C. Department of Consumer and Regulatory Affairs ("DCRA") every two years to remain in good standing.

The D.C. Council recently overhauled the Nonprofit Code, effective January 1, 2012. The new Nonprofit Code makes several changes to the law governing nonprofits, including the biennial report. Under the new Nonprofit Code, nonprofit organizations now have until April 1 to file the report. This is a change from the old law, which required nonprofits to file the form by January 15.

Your nonprofit should receive a copy of the report form in the mail, reminding you to register. You can also find a copy of the report form and the instruction sheet (as a Google doc). There is an $80 filing fee.

Filing this report is essential, especially for nonprofits incorporated in D.C. If a non-D.C. nonprofit fails to do so, it will lose its authority to do business in the District.

More importantly, however, if a D.C. nonprofit corporation fails to file the report on time, the organization may face several adverse consequences.

First, if your nonprofit files the form after April 1, you will have to pay DCRA a late fee of $50. In addition, if your nonprofit continues to fail to file the report form, the nonprofit organization's corporate charter will be revoked. If that happens, the nonprofit's officers and employees may no longer be shielded from liability for the acts of the nonprofit, and the validity of the organization's existing contracts, such as its lease, grants and other agreements, could be questioned.

Therefore, it is important that a nonprofit file its biennial report by the due date. To check on your nonprofit's corporate status, you can visit the DCRA website. While examining your organization's status, you should also ensure that its address and the name and address of the registered agent are correct. You are required to keep this information up to date. Moreover, if it is out of date, you may not receive a copy of the report form in the mail, and, consequently, may forget to file it on time. You can update that information by completing the change in registered agent form.

If the website shows that your organization's charter has already been revoked, the charter can be reinstated if you complete an application for reinstatement. If you have any questions about the form or the filing process, consult the DCRA or your lawyer. If you do not have a lawyer, the D.C. Bar Pro Bono Program can match eligible nonprofit organizations with pro bono legal counsel.

If you have any questions about the attached materials, please feel free to contact via email Regina Hopkins and Darryl Maxwell.

Free workshop on the code changes
The New D.C. Nonprofit Code and Nonprofit Governance. The District of Columbia Mayor's Office of Partnerships and Grant Services, D.C. Bar Pro Bono Program, and Crowell & Moring LLP will offer a comprehensive workshop on the New D.C. Nonprofit Code and Nonprofit Governance on Wednesday, January 18, 2012, 9:00 a.m. - 11:00 a.m. at the offices of Crowell & Moring LLP, 1001 Pennsylvania Avenue, NW, Washington, D.C. This workshop will discuss the basic provisions of the new D.C. Nonprofit Code, which went into effect on January 1, 2012, and how it will impact how the nonprofit governs itself. Nonprofits will learn about the new rules regarding membership organizations, the fiduciary duties of officers and directors, board committees and registered agents. Regina Hopkins, the Assistant Director of the D.C. Bar Pro Bono Program, will be the presenter. To register call 727-8900 or email Angela Peaks.

The workshop is free of charge.

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