Nonprofits / Exempt Organizations
Federal Law
Each classification has a specific purpose, and has a specific framework within which it must function in order to keep that designation.
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Minnesota Law
It has a framework for incorporating, but allows the incorporators to determine the purpose, form and function.
A corporation may be incorporated under this chapter for any lawful purpose, unless another statute requires incorporation for a purpose under a different law. Unless otherwise limited in its articles, a corporation has a general purpose of engaging in any lawful activity. A corporation engaging in conduct that is regulated by another statute is subject to the limitations of the other statute.
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Issues:
- HOA/CIC is an unregulated industry
- Minnesota doesn't require nonprofits to file for federal exempt status
- If a nonprofit doesn't have paid staff, they are not required to register with the Minnesota Attorney General's office.
- Majority of Minnesota housing laws are around renters and purchasing a home.
- Minnesota law's around CIC's offer no protections for home owners. What few laws that currently exist are based on an assumption - but no validation - that the organization is operating in a compliant matter, yet it doesn't offer in any clear manner what "compliant" actually is.
- There are no standards of conduct required for associations.
- There are no resources available for home owners in a CIC/HOA.