An Administrator's Guide to California Private School Law Compendium

 Specify the quorum requirements for directors and committee meetings and the percentage of votes required for certain actions.  Identify any “core” standing committees that the corporation intends to utilize every year (e.g., Executive Committee, Finance Committee, Nominating Committee, Development Committee, Audit Committee and Compensation Committee) and any restrictions on the makeup of the committees.  Specify whether creation of additional, ad hoc committees is permitted.  Include a bylaw stating the procedure to avoid self-dealing transactions by Directors.  Include a non-discrimination statement applicable to students.  Include a prohibition on partisan activities.  Include bylaws specifying that the corporation will establish and abide by the following policies: whistleblower policy; document retention and destruction policy; and joint venture policy. (The policies themselves should not be included in the bylaws.)  Bylaws (and any amendments) are NOT filed with the Secretary of State but are kept with the school’s permanent records.  Apply to the IRS for 501(c)(3) status:  Apply for an Employer Identification Number by filing IRS Form SS-4.  If someone other than the CEO or Director will be representing the school with respect to the application, file IRS Form 2848, the Power of Attorney and Declaration of Representative.  Within 15 months after incorporation, file IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3).  NOTE: Form 1023 does not need to be filed at all until gross receipts are more than $5,000. Once that threshold is exceeded, Form 1023 must be filed within 90 days of the end of the year in which it exceeded the threshold.  Await issuance of the IRS determination letter recognizing the school’s tax exempt status.  Keep determination letter in school’s permanent records.  Apply to the California Franchise Tax Board for state tax exempt status:  File FTB Form 3500A along with a copy of the IRS tax exempt determination letter.  Apply for property tax exemption, if necessary, in the county in which the school is located.

An Administrator’s Guide to California Private School Law - Compendium ©2019 Liebert Cassidy Whitmore 10