How to Start a Nonprofit Corporation in California

If you are considering starting a nonprofit corporation in California, here's a guide to the process. California is surprisingly behind in the electronic-filing department, so let's hope you're not in a hurry.

Instructions

Difficulty: Moderately Easy

1. Open your web browser and enter the website address of the California Business Portal at www.sos.ca.gov/business/. From the bulleted menu list under the "Business Entities" heading, click the first item: "Corporations." Bookmark the page that opens because it has a left sidebar with everything you will need to use.
2. Start by either requesting a search for available names, or by sending a request to reserve a corporate name, which also initiates a search. Unfortunately, you can’t do this online--you will have to send in a form and wait up to three weeks.
3. To request a name search, on the left menu of the "corporations" page, click the sixth item from the top, "Name Availability." Scroll to the bottom, and click the link "Checking the availability of a corporate name." Now, click on the link "Name Availability Inquiry Letter form," and download the letter. Fill out the form with up to three names, and mail to the address given on form.
4. To skip the preliminary search, send a request to reserve your nonprofit corporation name by clicking "Name Availability" from the left sidebar on the "corporations" page. Then, click the "reserve" link. Next, click the link "Name Reservation Request Form." Fill out the form with your first three name choices, and send it to the Secretary of State (SOS) with a $10 check.
5. Download and fill out your organization form after you receive your corporate name reservation. Go to the "corporations" page, and click "Forms, Samples and Fees" from the left sidebar. Next, click the "Business Entities" link. From the "Corporations" list, click item 5, "Articles of Incorporation (Domestic Nonprofit Mutual Benefit, Public Benefit or Religious Corporation)".
6. Read the descriptions of the three types of nonprofit corporations, and decide which type you want to start. Print out the corresponding form from the three examples that follow, and start filling it out. Fill in the corporate name you reserved. Write out the purpose of the organization, using any specific language to clarify the tax-exempt status, if needed.
7. Fill in your residence or business address if you have one for the corporation. If you live outside California, fill in the name and address of a California resident who will serve as agent. Sign the form as incorporator. Mail the completed form with a $30 check or money order to the SOS at the address given in the instructions. Processing may take six weeks or more.

Tips & Warnings

• If you are ready to start a nonprofit corporation in California, skip the preliminary name search, which only lengthens the already tedious process.
• Mutual-benefit nonprofits have different rules for handling distributions and property than public and religious nonprofits. You may want to consult a business attorney before deciding what type of corporation to organize.
• To become a tax-exempt corporation, a copy of the federal exemption certificate must be filed with the California Secretary of State, along with Form FTB-3500A. The form can be found at www.ftb.ca.gov/index.shtml by searching for the form number.
• Federal tax exemptions for nonprofit corporations are described on the IRS website at www.irs.gov/charities/index.html.