Do you need Lawyers to Form a Non-Profit?

A non-profit organisation is a business where the financial gain is for a public, collective and social benefit instead of the benefit of the owner. Most non-profit start-ups do not believe they need a lawyer, because they aren’t making profits for themselves and are tax exempt. Even if your business is non-profit or for-profit you still need a lawyer to advise and help you with all areas of law that any business entails.


A non-profit organisation will become tax-exempt which means the owner, shareholders and trustees do not get financial gain from the organisation. The money made within the organisation goes back into its own expenses or is used to help the collective like in a charity organisation.

1. From the Start

When you think of a business lawyer, it is common to think of them dealing with for-profit organisations and companies. So thinking of them dealing with a non-profit organisation may be a thing that slips your mind. Non-profits will still handle money and go through financial transactions, just not in a way that is gained for their own benefit. So having a lawyer by your side when these transactions are made will be nothing but helpful. However, Lawyers do not only deal with money issues within law, from the start your business name needs to be trademarked and having a lawyer there will make sure no one takes this name and uses it for themselves. It will complicate things if a for-profit business takes your business name or uses it, it could confuse people.

2. Paperwork

You will need Incorporation paperwork in order to set up your business, these papers comply with the current UK laws. These papers will let the government know what the purpose of your organisation is, you will need to fill these out and send them off when applying for your organisation to be incorporated. A lawyer will have experience filling these papers out with you and filing the fees. They will know the ins and outs of it to ensure you don’t do anything wrong or forget to add anything.

These papers will include:

●     Organisation name

●     Your name

●     The address

●     Your intentions

●     Names of your board members

3. Employees/ Volunteers

When you run a non-profit business you may still have employees and or volunteers and contracts will need to be drafted. With the volunteers even though no money is being handed over, boundaries and rules still need to be set so no one takes advantage and abuses your business for their own gain. Having a lawyer to draft up these contracts is always advised and as well as for settling any dispute which may occur.

4. Tax issues

The ability to obtain tax-exempt status from the UK government is one of the most compelling reasons to form a non-profit. To apply for a tax-exempt status and income tax exemptions, you must file the relevant exemption application. Another issue that an expert lawyer will be able to handle effectively is this one. Only non-profits with a religious, charitable, scientific, educational, or literary objective that operate for the public benefit are qualified. They must adhere to certain formalities and record-keeping procedures in order to maintain their non-profit status. A professional lawyer’s role is to ensure that your organisation qualifies for and complies with tax rules that apply to non-profits.


5. What type of Lawyer do you Need?

When searching for the correct Lawyer, it's a good idea to find a corporate lawyer who focuses their profession on non-profit organisations and has experience in this area if you need legal assistance with the procedure. A business lawyer who mostly handles corporations rather than non-profits is unlikely to have the experience you require. There are many areas of your business that the lawyer will be able to handle, they are;


●     Advising on the creation of the business plan

●     Guidance about charitable solicitations

●     Help with filling out the paperwork

●     Tax-exempt filing

●     Contract reviews and drafts

●     Helping with employment laws/ policies you need to make

●     Regulation and compliance guidance

●     Advice on forming your board of directors

6. How to Afford a Lawyer

If your organisation does not make a profit, you might think that a lawyer would be happy to volunteer their time to help you. That, however, is an impractical assumption. Providing legal counsel to a non-profit organisation is a complicated, time-consuming task, that does not go without a price. If you want the correct and experienced representation for your company you will need to pay for it, it is a necessary expense that you need to take into account when setting up your budget. You could always ask the lawyer you've considered hiring if they provide a flat price for non-profit setup and certain sorts of paperwork preparation to try to keep your costs down. You might be able to work out a payment plan for legal services or discuss restricting the scope of your representation to keep costs down. It's critical to agree on an hourly rate ahead of time so you can budget.

Getting help

Like with a for-profit organisation, finding a lawyer is a long, complex and sometimes expensive task. However, choosing a lawyer for your non-profit organisation is an important decision and one that should be done through careful research and consideration. If you know you do not have the time to do this research, Mishoura is a company that can. Joining them will ensure all the hard work and time is taken off your hands to help you get back to your organisation. They help get lawyers for all different types of businesses including non-profit ones. Once you tell them exactly what you want, including your budget for a lawyer, they will come back within 90 minutes with a short list of 2 law firms to pick from. Make sure you have the right representation for the right price to help your organisation grow and do the good you plan to do.

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