Starting a nonprofit organization may be overwhelming if you're just learning the basics. In Tennessee, you'll be facing a large amount of legal paperwork that you'll need to read through and fill out carefully. In this article, everything you'll need to do is condensed in just 11 steps. Hopefully, this will make the start-up of your nonprofit organization in Tennessee a little easier for you.
Things You'll Need
- Business plan
- Bylaws of your organization
- Articles of incorporation
- Form 1023
- Application for registration of sales tax exemption
- Form SS-6001
- Most recent Form 990
- IRS determination letter
The Start-Up Process
Figure out what to name your nonprofit organization. Make sure the name isn't taken, so you're not infringing on copyright. Go to your Tennessee State Secretary's corporate records at tennesseeanytime.org/soscorp/ for a business search. You're not required to register your organization's name, but you can register it to better protect it legally.
Go to the Internal Revenue Service's online site at IRS.gov to acquire an Employer Identification Number. This will be used as the organization's identification number—similar to a social security number—for all of your legal documentation in the future. Print out the paperwork when it's complete, and file it in a safe place.
Fill out your articles of incorporation, which you can download at state.tn.us/sos/charity. Make sure the IRS standard codes are correct. Make sure your charitable purpose is written correctly and that you have at least one or more directors, with one or more incorporators signing it.
Send this paperwork to the Tennessee Department of State. The filing fee will cost you $100, so make sure the information is filled out correctly before mailing. By law, you will also need to send a copy of your charter to the Office of the Register of Deeds in the county where your principal office is located, for recording purposes. Save a copy of all your documents.
You will need to gain Tax-Exempt 501(c)(3) Status. Download Form 1023 from state.tn.us, and go through it section by section. Organize your bylaws and complete framework of your organization. It will be good to have your business plan fully worked out as well. You may need time to accumulate financial reports to prove you're qualified for tax-exempt status.
Once you're ready, fill out Form 1023 according to the standards of the IRS. Prepare all the attachments necessary, and follow the directions carefully. The application fee will be $300 if you'll be making less than $10,000 a year, or $750 if you'll be making more than $10,000 a year. Mail it to the Internal Revenue Service.
You may have heard that some states will want you to register for your Franchise and Excise Tax Exemption. In the state of Tennessee, your nonprofit organization is automatically exempt from franchise and excise taxes, so you can skip this step.
You will have to apply to be registered with a Sales Tax Exemption. The Application for Registration for Sales and Use Tax Exempt Entities can be found at state.tn.us/sos/charity. It's about a page long, with extra instructions included. It has no filing fee attached. Mail it to the Tennessee Department of Revenue when you're finished.
Before getting any contributions, your nonprofit organization must be registered with the Charitable Solicitations Division of the Tennessee Revenue Department. Fill out Form SS-6001, which you can retrieve from state.tn.us/sos/charity. You will also need to prepare copies of these documents to attach to your form: your most recently filed Form 990, IRS determination letter, articles of incorporation and bylaws.
Mail your Form SS-6001 to the Tennessee Department of State in the Charitable Solicitations Division. This filing fee will be $50. Certain organizations, such as religious institutions and educational institutions receiving under $30,000, are exempt from filing. Also, if you're making over $300,000 a year, you will need to send audited financial statements every year.
If you have any questions or are uncertain in any way about how you're filing your paperwork, it's best to get legal help. One small mistake could cost you hundreds of dollars. Using certified legal help will save you time, stress and hassles.