Legal & Regulatory Requirements
For Non-profits and Social Enterprises
Non-Profits
Social Enterprises
Legal Requirements
Regulatory Requirements
Legal Requirements
Regulatory Requirements
Similarities
Differences
Have federal and state laws
Funds must be allocated for the purpose stated in the organizations charter
Cannot distribute excess funds to founders or employees beyond regular pay
Attorney General or State court of law can override board decisions
Write Charter and Bylaws of organization
Must file 501(c)(3) for tax exemption
Strict financial reporting guidelines
No lobbying or electioneering
Must pay taxes
Funding comes through donations, grants, loans, or earned income
Funding comes from equity investment, loans, or earned income
Pay employment tax
Monetary donations are taxed as income
Owners of non profits are not personally responsible for debts of the organization but they are in social enterprises
Social enterprises allow owners to make a profit off their investment while still doing good for others where as non-profits are limited to the pay they can give.
Non-profits have more regulations
Both have purposes to benefit a community
Taxation like VAT