How to Form a Not-for-Profit Corporation

How to Form a Not-for-Profit Corporation

• 1). Contact your secretary of state or other appropriate state agency that handles nonprofit incorporation. You can find the right office at the National Association Secretaries of State website. The state office will send a packet of information about its incorporation process, along with sample documents to help you. Requirements to file articles of incorporation vary from state to state, but what is generally required is that you choose a name that is legally available in your state; provide the name(s) of the person(s) organizing the corporation and the purposes for which it is being formed; state that no part of the organization's assets will benefit members; provide the number and names for the initial board of directors, and the director or head of the group; and provide the location of the corporation's office where legal papers can be served.
  
  
• 2). As part of the process of being incorporated--if you haven't done so already--you'll need to choose a board of directors; develop vision and mission statements to guide the work of your organization; and establish board policies and bylaws. States may include examples of these documents in the packet they send to you on incorporation. Bylaws are a document that describes how your organization will be managed. Requirements for bylaws are determined by the state in which an organization incorporates.
  
  
• 3). File your articles of incorporation with the state. Once you are notified that your articles are on file with the state, your organization is a legal nonprofit corporation. You can now apply for tax-exempt status with the Internal Revenue Service (IRS). It is best to do this within 15 months after the date of your incorporation. If you wait longer to submit your application, and the IRS rules you are not tax-exempt, you may be subject to back taxes and penalties. It can take 3 to twelve months for the IRS to rule on whether your group is tax-exempt.
  
  
• 4). You may need to apply to your state for tax-exempt status, too. Some states accept the same paperwork you filed with the IRS; while others will require you to send a copy of your IRS determine letter ruling you are tax-exempt. Contact your secretary of state or state charity office for the correct procedure. As well, you should check and apply for any additional state and local laws relating to being a nonprofit. For example, if you intend to solicit public funds for your organization, you should check the charitable solicitation laws in your state and register, if required.
  
  
• 5). You must maintain corporate record books. These should include your articles of incorporation, bylaws, minutes of your first board meeting, tax exemption applications and determination letters and other official documents. The books should be kept at the organization's main office.