Subchapter A. INCORPORATION

§ 41.1. General checklist for incorporating nonprofit corporations. [Reserved]

 (a)  One or more corporations or natural persons of full age may incorporate a nonprofit corporation.

 (b)  A foreign corporation for profit or a foreign corporation not-for-profit may incorporate a nonprofit corporation. It is not necessary that the incorporator corporation be qualified to do business in this Commonwealth.

 (c)  Full age means 18 years of age or older.

 (a)  Section 5303 of the NPCL (relating to corporate name) does not require that the corporate name of a nonprofit corporation contain a corporate designator such as Corporation, Corp., Company, Co., Incorporated, Inc., and the like.

 (b)  The corporate name shall also comply with the applicable requirements of Chapter 17 (relating to names).

 (a)  Section 5301 of the code (relating to purposes) provides that a nonprofit corporation may be incorporated for a lawful purpose including one or more of the following or similar purposes:

   (1)  Athletic.

   (2)  A lawful business purpose to be conducted on a not-for-profit basis.

   (3)  Beneficial.

   (4)  Benevolent.

   (5)  Cemetery.

   (6)  Charitable.

   (7)  Civic.

   (8)  Control of fire.

   (9)  Cultural.

   (10)  Educational.

   (11)  Encouragement of agriculture or horticulture.

   (12)  Fraternal.

   (13)  Health.

   (14)  Literary.

   (15)  Missionary.

   (16)  Musical.

   (17)  Mutual improvement.

   (18)  Patriotic.

   (19)  Political.

   (20)  Prevention of cruelty to persons or animals.

   (21)  Professional, commercial, industrial, trade, service or business associations.

   (22)  Promotion of the arts.

   (23)  Protection of natural resources.

   (24)  Religious.

   (25)  Research.

   (26)  Scientific.

   (27)  Social.

 (b)  The stated purposes of a nonprofit corporation may not consist of solely a statement to the effect that its corporate purpose is to engage in all lawful business for which corporations may be incorporated under 15 Pa.C.S. Subpart A (relating to nonprofit corporations). Compare with 15 Pa.C.S. §  1301 (relating to purposes).

 (c)  Under section 5108 of the code (relating to limitation on incorporation), a corporation which might be incorporated under the code may not be incorporated under another statute. Accordingly, domestic corporations not-for-profit shall be incorporated under the code, except:

   (1)  Electric cooperative corporations, which are incorporated under Chapter 73 of the code (relating to the Electric Cooperative Law of 1990).

   (2)  Fraternal benefit societies, which continue to be incorporated under the Fraternal Benefit Society Code (40 P. S. § §  1141-101—1141-1001).

   The provisions of this §  41.4 amended under section 506 of The Administrative Code of 1929 (71 P. S. §  186); and the Associations Code, 15 Pa.C.S. §  133.

 The term of existence of a nonprofit corporation may be limited in the articles of incorporation. Section 5306(a) of the NPCL (relating to articles of incorporation) provides that the duration of a corporation is perpetual absent a provision in the articles setting forth a limited term. Section 5502(a)(1) of the NPCL (relating to general powers) that every nonprofit corporation shall have perpetual succession unless a limited duration is specified in its articles.

 (a)  Section 5306(a)(6) of the NPCL (relating to articles of incorporation) permits a nonprofit corporation to be organized on a stock share basis, in which case the articles of incorporation are required to set forth the aggregate number of shares which the corporation shall have the authority to issue.

 (b)  Section 5306(a)(6)(ii) of the NPCL authorizes the articles of incorporation of a nonprofit corporation organized on a stock share basis to set forth a statement of the voting rights, designations, preferences, limitations and special rights in respect of the shares of any class the fixing of which by the articles of incorporation is desired.

 (c)  Section 5306(a)(6)(iii) of the NPCL authorizes the articles of incorporation of a nonprofit corporation organized on a stock share basis to set forth authority vested in the board of directors or other body to divide by provision in the bylaws the authorized and unissued shares into classes or series, or both, and to determine for a class or series its voting rights, designations, preferences, qualifications, limitations and special rights.

 (d)  A typical provision of the articles of a nonprofit corporation which is not organized on a stock share basis reads as follows:

   The corporation is organized upon a nonstock basis.

 Section 5306(a)(7) of the NPCL (relating to articles of incorporation) authorizes the articles of incorporation of a nonprofit corporation to specify that the corporation is to have no members. In that case, section 5751(b) of the NPCL (relating to classes and qualifications of membership) provides that a provision of law requiring notice to, the presence of, or the vote, consent or other action by members of a nonprofit corporation shall be satisfied by notice to, the presence of, or the vote, consent or other action by the board of directors or other body of the corporation. A typical provision of the articles reads as follows:

   The corporation shall have no members.

 (a)  The first directors of the corporation may, but are not required to be named in the articles of incorporation.

 (b)  Section 5306(c) of the NPCL (relating to articles of incorporation) provides that the naming of directors in the articles of incorporation shall constitute an affirmation that the directors have consented in writing to serve as directors.

 (c)  If the directors are not named in the articles of incorporation, section 5310(a) of the NPCL (relating to organization meeting) provides that they shall be elected at the organization meeting of the incorporators.

 Section 5306(a) of the NPCL (relating to articles of incorporation) authorizes the articles of incorporation of a nonprofit corporation to contain other provisions consistent with the NPCL which the incorporator may choose to insert if one of the following exists:

   (1)  A section of the NPCL authorizes or requires provisions pertaining to the subject matter thereof to be set forth in the articles or bylaws of a nonprofit corporation or in an agreement or other instrument.

   (2)  The provisions are not inconsistent with the NPCL and relate to the purpose of the corporation, the management of its business or affairs or the rights, powers or duties of its members, security holders, directors or officers.

 Section 5331 of the NPCL (relating to unincorporated associations) provides that in the case of the incorporation as a nonprofit corporation of an unincorporated association the articles of incorporation shall contain, in addition to provisions otherwise required by the NPCL, a statement that the incorporators constitute a majority of the members of the committee authorized to incorporate the association by the requisite vote required by the organic law of the association for the amendment of the organic law.

 (a)  Section 5307 of the NPCL (relating to advertisement) requires that the incorporators shall advertise their intention to file or the corporation shall advertise the filing of articles of incorporation in the Department one time in two newspapers published in the English language, one of which shall be a newspaper of general circulation, and the other the legal newspaper, if any, designated by the rules of the court for the publication of legal notices, otherwise, in two newspapers of general circulation, published in the county in which the initial registered office of the corporation is to be located. If there is only one newspaper of general circulation published in a county, advertisement in that newspaper is sufficient. Advertisements may appear prior to or after the day the articles of incorporation are filed with the Department and shall briefly set forth the following:

   (1)  The name of the proposed corporation.

   (2)  A statement that the corporation is to be or has been incorporated under the NPCL.

   (3)  A brief summary of the purpose of the corporation.

   (4)  A date on or before which the articles will be filed with the Department or the date the articles were filed.

 (b)  Title 45 of the Pennsylvania Consolidated Statutes, section 307 (relating to effect of failure to advertise when required) provides that no legal proceeding or the like, in which notice is required to be given by official or legal advertising, shall be binding upon an interested person unless the advertising is effected and a proof of publication is filed of record in the matter or proceeding. The proofs referred to in this section may not be submitted to, and will not be received and filed by, the Department, but shall be filed in the minute book of the corporation.

   The provisions of this §  41.11 adopted April 17, 1992, effective April 18, 1992, 22 Pa.B. 1993.