State of the Nonprofit Regulatory Environment in ARKANSAS

1 Bifurcation of charitable regulatory body

Bifurcated Regulatory Structure

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-401

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Yes - Arkansas Code Annotated § 4-28-401 through 416

Registration Office

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

BIFURCD-REGIOF-NS

REGULATORY BODY: Not Specific

NOTES: Arkansas Secretary of State: https://www.sos.arkansas.gov/business-commercial-services-bcs/nonprofit-charitable-entities/charitable-entities

2 Notice, Filing or Review of Transactions

Sale of Assets

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-ASSETS-AG

REGULATORY BODY: Attorney General

NOTES: No

REPORTS-ASSETS-OT

REGULATORY BODY: Other

NOTES: No

Mergers

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-MERGER-AG

REGULATORY BODY: Attorney General

NOTES: No

AR Code § 4-28-305

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Filing with Sec. of State [A.C.A. § 4-28-305; 4-33-1104]; Religious and Public Benefit Corporation require consent of Court, unless it merges with another public benefit/religious org (foreign or domestic) or a mutual benefit corp. A.C.A. § 4-33-1102

AR Code § 4-33-1102

REGULATORY BODY: Other

STATUTE TEXT:

Certificate of Amendments

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-AMMEND-AG

REGULATORY BODY: Attorney General

NOTES: NO

AR Code § 4-28-206

REGULATORY BODY: Other

STATUTE TEXT: (a) Any association of persons or for-profit corporation organized under the Arkansas Business Corporation Act of 1987, ss 4-27-101 et seq., desirous of becoming incorporated under the provisions of the Arkansas Nonprofit Corporation Act, ssss 4-28-201 – 4-28-206 and 4-28-209 – 4-28-224, shall file with the circuit court of the county in which the main office or principal place of business of the proposed corporation is located or proposed to be located signed and verified articles of incorporation, which shall set forth the following: (1) The name of the corporation; (2) The period of duration, which may be perpetual; (3) The purposes for which the corporation is organized; (4) Any provisions, not inconsistent with law, which the incorporators elect to set forth in the articles of incorporation for the regulation of the internal affairs of the corporation, including any provision for distribution of assets on dissolution or final liquidation; (5) The address of its main office or principal place of business, and the name of its registered agent at that address; (6) The number of directors constituting the initial board of directors and the names and addresses of the persons who are to serve as the initial directors; (7) The name and address of each incorporator; (8) A statement that the corporation: (A) Is a nonprofit corporation; and (B) Has converted under the Arkansas Nonprofit Corporation Act, ssss 4-28-201 – 4-28-206 and 4-28-209 – 4-28-224; and (9) (A) A description of the treatment of shares of stock. (B) The description of the treatment of shares of stock: (i) May provide for the exchange of shares of stock for certificates of membership if the corporation has members; or (ii) Shall provide that the shares of stock be canceled by the board of directors if the corporation does not have members. (b) If the circuit court finds that the articles of incorporation conform to law and that the incorporation is for a lawful purpose and is in the best interests of the public, the court may issue an order approving the incorporation of the proposed association of persons. (c) If the court approves the incorporation, the articles of incorporation in duplicate, signed and verified, and a copy of the order of the court approving the incorporation shall be transmitted to the Secretary of State, who shall, when all fees have been paid as prescribed in the Arkansas Nonprofit Corporation Act, ssss 4-28-201 – 4-28-206 and 4-28-209 – 4-28-224: (1) File the original of the articles in his or her office; and (2) Issue a certificate of incorporation to which he or she shall affix the other copy of the articles endorsed with the word iFiledi and the month, day, and year of the filing and return the certificate of incorporation to the incorporators or their representative. (d) A corporation may amend its articles of incorporation from time to time, provided that the amendments are lawful under the Arkansas Nonprofit Corporation Act, ssss 4-28-201 – 4-28-206 and 4-28-209 – 4-28-224. A copy of all amendments shall be filed with the Secretary of State within thirty (30) days after their passage. (e) (1) A for-profit corporation may convert to a nonprofit corporation under the Arkansas Nonprofit Corporation Act, ssss 4-28-201 – 4-28-206 and 4-28-209 – 4-28-224, or the Arkansas Nonprofit Corporation Act of 1993, ss 4-33-101 et seq., upon the filing of an amendment to the corporation’s articles of incorporation with the information required under this section. (2) If an entity is a for-profit corporation that is converting to a nonprofit corporation, the conversion shall be approved by a three-fourths (ae) vote of the shareholders of the business corporation. (f) A conversion to a nonprofit corporation under this chapter is effective when an amendment to the articles of incorporation is filed with the Secretary of State and the Secretary of State has collected the filing fees, service fees, and copying fees required under ss 4-33-122. (g) A conversion to a nonprofit corporation under this chapter is not a dissolution.

NOTES: Filed with Sec. of State [A.C.A. § 4-28-206]

Does the state require annual financial reporting by charitable organizations in addition to filing a copy of the 990 with the regulator (if filing 990 is required)?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

AR Code § 4-28-403

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Financial Statement or 990: A.C.A. § 4-28-403

3 Notice or Action for Dissolutions

Voluntary Dissolutions

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

DISSOLV-VOLUNT-AG

REGULATORY BODY: Attorney General

NOTES: No

AR Code § 4-33-1401

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Secretary of State A.C.A. § 4-33-1401

Judicial Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-222

REGULATORY BODY: Attorney General

STATUTE TEXT: A corporation incorporated under the provisions of the Arkansas Nonprofit Corporation Act, ssss 4-28-201 – 4-28-206 and 4-28-209 – 4-28-224, may be dissolved involuntarily by a decree of the Pulaski County Circuit Court in an action filed by the Attorney General or by a decree of the circuit court of the county in which that corporation is domiciled in an action filed by the prosecuting attorney when it is established that: (1) The corporation procured its articles of incorporation through fraud; (2) The corporation has continued to exceed or abuse the authority conferred upon it by law; (3) The corporation has failed for ninety (90) days to appoint and maintain a registered agent in this state; (4) The corporation has failed to keep proper accounting records as provided in the Arkansas Nonprofit Corporation Act, ssss 4-28-201 – 4-28-206 and 4-28-209 – 4-28-224; (5) The corporation constitutes a public nuisance; or (6) The corporation has violated the laws of this state or the rules of any state regulatory board or commission having jurisdiction of any activity of the corporation.

NOTES: A.C.A. § 4-28-222; A.C.A. § 4-33-1430

AR Code § 4-33-1430

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: A.C.A. § 4-28-222; A.C.A. § 4-33-1430

AR Code § 4-33-1433

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Secretary of State A.C.A. § 4-33-1433

Administrative Dissolutions

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

DISSOLV-ADMINI-AG

REGULATORY BODY: Attorney General

NOTES: No

AR Code § 4-33-1420

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Sec. of State - A.C.A. § 4-33-1420

4 Notice, Oversight or Filing of Hospital Conversions

Has Statute

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

HOSPCON-STATUT-NS

REGULATORY BODY: Not Specific

NOTES: No

Requires Notice or Oversight

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

HOSPCON-OVERSI-AG

REGULATORY BODY: Attorney General

HOSPCON-OVERSI-OT

REGULATORY BODY: Other

Requires Filing

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

HOSPCON-FILING-OT

REGULATORY BODY: Other

5 Audits

Requires Audit

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-403(b)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Ark. Code §4-28-403(b)

Audit Threshold

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

AUDITFI-THRESH-NS

REGULATORY BODY: Not Specific

NOTES: 500000

6 Registration Law

Registration Law

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-401

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-401 et seq.

7 Exemptions from Registering for Specific Organization Types

Religious Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-404(1)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-404(1)

Small organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-404(6)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-404(6) ($25k)

Educational Institutions

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-404(2)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-404(2)

Governmental Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-404(4)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-404(4)

Hospitals

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-404(5)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Nonprofit hospitals: A.C.A. § 4-28-404(5)

Veterans organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-VETERA-NS

REGULATORY BODY: Not Specific

NOTES: NO

Foundations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-FNDYES-NS

REGULATORY BODY: Not Specific

NOTES: NO

Foundations that don’t solicit contributions

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-FNDNOS-NS

REGULATORY BODY: Not Specific

NOTES: NO

Charitable Trusts

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CTRUST-NS

REGULATORY BODY: Not Specific

NOTES: NO

Parent-Teacher Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-404(2)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-404(2)

Reports to congress

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CONGRE-NS

REGULATORY BODY: Not Specific

NOTES: NO

Non-soliciting

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-402(a)(1)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-402(a)(1)

Fraternal/ Membership

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-MEMFRA-NS

REGULATORY BODY: Not Specific

NOTES: NO

Political Orgs

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

AR Code § 4-28-404(3)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-404(3)

Other

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-OTHTYP-NS

REGULATORY BODY: Not Specific

8 Defined remedies

Dissolution

Regulatory Action: REMEDY

YES: A regulation is defined in the state

AR Code § 4-28-222

REGULATORY BODY: Not Specific

NOTES: Ark. Code Ann. § 4-28-222

Removal of Board Members

Regulatory Action: REMEDY

YES: A regulation is defined in the state

AR Code § 4-28-222

REGULATORY BODY: Not Specific

NOTES: Ark. Code Ann. § 4-28-222

9 Oversight of professional fundraisers

Does the state require registration by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-407

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-407

Does the state require registration by fundraising counsel?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-406

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: “(a) A person shall not act as a fund-raising counsel until he or she has first registered with the Secretary of State. (b) Applications for registration shall be submitted: (1) In writing; (2) Under oath; (3) In the form prescribed by the Secretary of State; and (4) Accompanied by an annual fee in the sum of one hundred dollars ($100). (c) (1) Registrations are valid for a period of one (1) year. (2) Registrations may be renewed upon the filing of a new application and the tendering of the fee previously prescribed for registration.” A.C.A. § 4-28-406

Does the state oversee commercial-coventuring (e.g. by requiring that the co-venture be registered or by requiring that the charitable organization files the co-venture contract)?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-408

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: “Every charitable organization subject to the registration requirements of this subchapter that agrees to permit a charitable sales promotion to be conducted in its behalf shall obtain a written agreement from the commercial coventurer and file a copy of the agreement with the Secretary of State before the commencement of the charitable sales promotion within this state.” A.C.A. § 4-28-408

Does the state require the fundraisers to provide notice to the regulator before any solicitation campaign (in addition to annual registration and/or filing the contract)?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-407

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Paid solicitors must file contract for each campaign 15 days before the start of each campaign: A.C.A. § 4-28-407

Does the state require specified disclosures to donors?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-409

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-409

Does the state require a copy of any contract between a charitable organization and a commercial fundraiser or fundraising counsel be filed with the regulator?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-405

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A.C.A. § 4-28-405

Does the state require annual financial reporting by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-407

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Paid solicitors must file financial reports 90 days after end of campaign, or one year after start of campaign (for campaigns lasting longer than one year): A.C.A. § 4-28-407

Does the state require bonding of professional fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

AR Code § 4-28-407

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: An applicant for registration as a paid solicitor at the time of making the application shall file with, and have approved by, the Attorney General a bond in the sum of ten thousand dollars ($10,000), with one (1) or more responsible sureties. AR ST § 4-28-407