Just because a nonprofit incorporation
may have a group or cause's best interest at
the heart of its mission does not mean that it is exempt from lawsuits. For this reason, board directors and entrepreneurs
should be sure to take the proper steps to protect themselves from liability and their nonprofits from any legal fiascos.
For example, all agreements made by a nonprofit organization should be written down prior to making any final transactions. Often, the everyday processes require more than a simple oral agreement.
"To prevent misunderstandings and disputes, your organization should establish exactly what's being agreed to, and put it in writing. That way, if a dispute arises … you'll have written evidence to present in court," the website Nolo reported.
"The agreement doesn't have to be written in tortuous legal language. What's important is that both sides understand it. If you're presented with a standard form agreement, don't feel you have to live with it as-is," it added.
A nonprofit organization should also have a legal professional on its team before a lawsuit or other trouble enters the picture. The day the board is served with a lawsuit is not the day to begin looking for this person, as it may be too late to contract an attorney by then. Instead, be sure to have a reputable one from the start and make him or her familiar with business operations.
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