By incorporating as a not-for-profit organization, Stellar Development Foundation has voluntarily set itself to a more restrictive set of legal requirements than a traditional company. In preparing our application for tax-exempt status as a charitable organization, we are aware that achieving tax-exempt status will subject us to an even higher level of legal oversight and transparency requirements.
Given the complexity of nonprofit and tax-exempt law, we asked our nonprofit legal counsel, Adler & Colvin, to prepare a memo that covers some of the more frequently asked questions about Stellar’s nonprofit and anticipated tax-exempt status.
You can read or download the memo here.
For handy reference, here are some of the requirements we must comply with now and in the future:
Requirements of a not-for-profit organization
- No stock
- No profits can be given to individuals
- No private inurement
Some of the requirements of a not-for-profit AND tax exempt organization
- All compensation for nonprofit staff must be reasonable
- Executive compensation shall be published with annual tax filings (Stellar has been publishing aggregate amount of stellar compensation for the entire team since July 31, 2014)
- Annual financial reporting is required (Stellar has gone beyond these requirements by publishing preliminary unaudited quarterly financials)