Should your HOA be a nonprofit organization or corporation?
As trusted advisors about Indiana nonprofit law, we are often asked about corporation matters for community associations.
In particular, we are asked whether to set up the HOA as a nonprofit or a corporation. Technically, a nonprofit is a type of corporation. Most Indiana homeowner associations or community associations are established as Indiana not-for-profit corporations and governed by the Indiana Nonprofit Corporations Act.
What it means to be a nonprofit corporation
If your HOA is an Indiana not-for-profit corporation, board members and property managers need to understand:
The importance of filing of the Indiana Business Entity Report with the Indiana Secretary of State.
How to maintain proper minutes and follow other corporate formalities.
How to address requests or demands that directors be removed and a new Board of Directors be elected.
The Board’s limitations on spending authority.
If you have questions about Indiana nonprofit law as it pertains to corporation matters, we’re here to help. We can advise you on the important intricacies and implications of being not only an association of owners, but also a corporate business entity.
