How to Set Up a Non-Profit Business
Community groups, churches and social organizations may consider turning their shared interests into a non-profit business. While starting a business as a non-profit organization offers certain legal and tax protections, the group's status as a 501(c) group also comes with specific requirements that differ from state to state. This guide provides a broad overview of the initial steps needed to form a new non-profit organization.
Other People Are Reading
Instructions
-
-
1
Develop a name and mission statement for your non-profit business. These should be brief and clearly articulate the purpose of the organization. You will need these when filing your state articles of incorporation.
-
2
Recruit a board of directors for your organization. Most states require an incorporating board (the board in place when the business is formed) of at least three members, each of whom has no other connection to the organization. For example, the board members should not be members of the business's staff.
-
-
3
Hold your first board meeting and take accurate minutes at this and all future board meetings. Meetings for non-profit organizations are usually governed by Robert's Rules of Order.
-
4
File your business's articles of incorporation with your state. The articles include critical information such as your organization's name and mission, the names and contact information for the incorporating board and the business's exempt purpose under the IRS code.
-
5
When you receive your official copy of your articles of incorporation, apply for an employer identification number (federal tax identification number) through the IRS. Then file IRS Form 1023 (Application for Recognition of Exemption) to secure your tax-exempt status. Note that this process can take up to six months to complete.
-
6
Once your Application for Recognition of Exemption has been accepted and approved, file for any necessary state and local tax exemptions. In addition, to conduct any fundraising activities, your organization may need to register with your local charities registration bureau.
-
7
File for any applicable state sales and property tax exemptions, based on your group's qualifications.
-
8
Draft your organization's operational bylaws and have them approved by the incorporating board.
-
1
Tips & Warnings
Consider consulting an attorney who is well versed in forming non-profit organizations. There are a number of federal and state regulations that govern how non-profits are formed and managed, and the right attorney can simplify and streamline a complicated process.
References
Resources
- Photo Credit michelini at stock.xchng
More Like This
Comments
-
I want to start my non- profit for poor & needy who need money education & gospel we have planned but how get help and start my NGO pls help me if sum body have some suggestion.
