Non-Profit Registration

How do you form a nonprofit corporation?

Non-profit corporations follow state laws that are very different from those of standard corporations—but the business formation process is very similar. Non-profit Articles of Incorporation must be filed with the state and applicable state filing fees paid. In order for your nonprofit to become tax-exempt, Form 1023 must be filed with and approved by the IRS. Some states also require a state-level tax-exempt status filing.

Before you can apply to the IRS for tax-exempt status, your organization must first become a corporation. Incorporation will protect board members and other individuals in your organization from being held personally liable in case of a lawsuit. Nonprofit incorporation is very similar to creating a regular corporation except that a nonprofit must take the extra steps of applying for tax-exempt status with the state in which it incorporates and with the IRS.

Nonprofit incorporation usually involves these steps:

• Choose a name that is legally available in your state.
• File your "articles of incorporation," and pay a filing fee.
• Apply for federal and state tax exemptions.
• Create bylaws that will dictate how the corporation is run.
• Appoint an initial board of directors.
• Hold the first meeting of the board of directors.
• Apply for any licenses or permits that your corporation will need to operate in your state and local municipality.

Your state's corporate filing division is usually part of the secretary of state's office. You can also look up your state office through the National Association of State Charity Officials (NASCO). You can request a packet of nonprofit materials from that office which will include sample articles of incorporation, the state's laws on nonprofit corporations, and instructions on how to find an available business name.

After you have filed all the paper work for nonprofit incorporation in your state, and received a copy of your articles of incorporation, you can move on to submitting your application to the IRS for your federal nonprofit status as a 501(c)(3) organization. It is best to file within 27 months after the date of your incorporation.

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