Incorporating

Non-for-profit entities can be either:

• • unincorporated association

  • LLC

  • C-corporation

Masjid can stay as unincorporated non-for-profit association but it will have the following problems:

• • All members of an unincorporated masjid could be legally liable for the negligent or criminal acts of one of their fellow members, directors or employees

  • It is not a good idea to own a real property (like a masjid) without forming a business entity (using an individually own property can cause a huge problem in the future if that individual or his heirs reclaim their property after the masjid had been build on it)

LLC can register with IRS as non-for-profit only if all of its members are non-for-profit organizations and not individuals

Non-for profit organizations are generally classified as C-corporations

Therefore, do not use unincorporated association or LLC for your masjid and instead use C-corporation

Name the corporation, making sure that your name is unique and permissible. In other words, you can’t use a name that someone else has already claimed. Also, there are certain words the government doesn’t allow corporations to use in their names in an effort to prevent businesses from misleading the public.

General meeting of the members or founders to vote on the following:

• • • • • Ratification of the incorporation decision

        • Appoint one to three directors (president, treasurer and secretary), depending on your needs and state requirements. All corporations must have directors whose responsibility is to oversee the organization, advise management, and make key decisions.

        • Appoint an attorney or someone to act as the incorporator who will process the incorporation paperwork

        • Designate a registered agent. This is a person or an entity with a physical address in the state who can accept official mail on behalf of the masjid. Once a masjid is built or purchased, move the address to the masjid’s physical address.

        • Discus and approve bylaws, operating agreement and policies

        • Start a record book in which you keep minutes from this and subsequent meetings.

        • Where the assets of the masjid with go in case of desolution. Usually they go to another non-for-profit (preferably a masjid)

Fill your article of incorporation on secretary of state's website or other state website for the agency that processes business registrations

• • • • You will need a purpose clause that is taken from the masjid's bylaws (vision, mission, core values and goals)

      • It is recommended you add the following clause as well: “This corporation is organized exclusively for charitable, religious, and educational purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code.”

      • You will be asked to decide where the fund would go if the masjid is dissolved. You may choose another masjid or non-for-profit organization

      • File the non-profit articles of incorporation with the state and pay the fee

      • Once the state accepts the filing, the masjid is incorporated