Categories: Business Entities

How to Start a Non-Profit Corporation

We have written on non-profit corporations before, but as we only dedicated a sliver of a paragraph to how you actually form a non-profit, we felt the topic was worth revisiting. A non-profit corporation is a great way to fulfill a philanthropic pursuit, and if you are looking at dedicating your life to charity, then running a non-profit may be right up your alley. Forming a non-profit corporation is actually very similar to forming a regular corporation.

Step 1. Find a business name

Your non-profit is going to need a name just like with any other standard corporation. That name needs to be unique and, typically, has to include the a designator like ‘Corporation’ or ‘Incorporated,’ though not all states require that.

Step 2. File your Articles of Incorporation

After you’ve confirmed that your corporate name is available, you have to actually form the corporation by filing what is normally known as your Articles of Incorporation. The forms usually aren’t too complicated, and normally just ask for the names and addresses of the corporation, its registered agent, and its directors, as well as the corporation’s purpose for existing.

Step 3. Write your mission statement and bylaws

The first part of this step is very, very important because your mission statement is one the key documents that the IRS and state tax agencies will review when determining whether or not to grant the corporation non-profit status. What do you hope to accomplish with your non-profit? Who do you want to help? What sort of a vision do you have?  You need solid answers to those questions before you ever begin to raise money. Along with your mission statement, you should draft corporate bylaws. Though not normally legally required, they will be the set of rules that guide how your non-profit is run, so they are important to have.

Step 4. Hold an organizational meeting

Once your Articles of Incorporation are filed, you should hold an initial organizational meeting to appoint corporate officers and any new directors to the board. This initial meeting will also be when the non-profit adopts any bylaws and sets its annual budget. You must also keep minutes for this, and every subsequent, meeting as the IRS or state tax agency may wish to review them.

Step 5. File for tax-exempt status

Finally, once your articles are filed, your boards are set, and your bylaws adopted, you file for non-profit status with the state and federal governments. The IRS requires would-be non-profits to file Form 1023 and pay a fee, after which the agency will review the company and decide whether or not to grant tax-exempt status. The form is very detailed, and requires that you disclose all compensatory arrangements and answer a series of questions. Some states also require their own forms before exempting corporations from state taxes, so check with your secretary of state or department of corporations to see whether or not Form 1023 covers your state.

Once everything is filed and you’re approved for non-profit status, you can begin fundraising. But first be sure to read our other post on how to run a non-profit!

As always, if you have any questions feel free to leave a comment below, or just give us a call at 1-877-692-6772!

Deborah Sweeney

Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With extensive experience in the field of corporate and intellectual property law, Deborah provides insightful commentary on the benefits of incorporation and trademark registration. Education: Deborah received her Juris Doctor and Master of Business Administration degrees from Pepperdine University, and has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in corporate and intellectual property law. Experience: After becoming a partner at LA-based law firm, Michel & Robinson, she became an in-house attorney for MyCorporation, formerly a division in Intuit. She took the company private in 2009 and after 10 years of entrepreneurship sold the company to Deluxe Corporation. Deborah is also well-recognized for her written work online as a contributing writer with some of the top business and entrepreneurial blogging sites including Forbes, Business Insider, SCORE, and Fox Business, among others. Fun facts/Other pursuits: Originally from Southern California, Deborah enjoys spending time with her husband and two sons, Benjamin and Christopher, and practicing Pilates. Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Deborah, and MyCorporation, have previously been honored by the San Fernando Valley Business Journal’s List of the Valley’s Largest Women-Owned Businesses in 2012. MyCorporation received the Stevie Award for Best Women-Owned Business in 2011.

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