How do I Start a Non-Profit Organization in South Carolina?

Tax exemptions provide relief to often financially needy nonprofit organizations.

There were 850 nonprofit organizations registered with the South Carolina Association of Nonprofit Organizations in 2007, according to the association. These include groups putting all of their revenue into programs to preserve the state's 187 miles of coastline or to educate about Fort Sumter. Some nonprofits act as watchdogs, executing many community goals including those related to educational, environmental, historical and health-related fields. Nonprofit status is the government's way of watching out for these groups by exempting them from taxes and ensuring that the maximum cash flow goes back to the community. Nonprofits take many forms, but in South Carolina they are corporations.

Instructions

Structure

1. 

   You will want to apply for exemption if you represent a religious organization.

   Determine whether you will proceed as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, which defines an exempt organization as "charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals". You are a "for profit" corporation if you don't meet these requirements.

2. Decide also whether you will apply to South Carolina as a charitable organization. The state determines a charity to be any 501(c)(3) that uses solicitations as its funding source instead of grant funding. However, religious organizations and political parties cannot be charities.

3. Choose a registered agent in the state of South Carolina. A registered agent is an "officer appointed by a corporation to receive legal notices or processes on the corporation's behalf," according to BusinessDictionary.com. This is a person who lives or has an office in South Carolina.

Incorporation

1. 

   Your organization's name will appear exactly the same on all government documents.

   Write your articles of incorporation. The South Carolina Secretary of State has a form that you can fill out, but the IRS standards for nonprofit incorporation are more stringent. Use the template for the Articles of Incorporation for a Nonprofit found on the IRS website instead of the South Carolina form to streamline your IRS 501(c)(3) application.

2. Attach the necessary form for the South Carolina Secretary of State to your articles of incorporation. It can be found on the website as the "501(c)(3) Attachment." If you are applying as a charity in South Carolina, make sure you fill out the "Application for Exemption" for charitable organizations.

3. 

   Make sure you attach the appropriate postage for the weight of the package.

   Send the documents to the South Carolina Secretary of State. Include all fees with your forms. Also include a self-addressed stamped envelope to ensure you receive your Certificate of Incorporation, and double-check to ensure everyone has signed all forms. This is the mailing address of the Secretary of State:

   SC Secretary of State's Office

   1205 Pendleton Street Suite 525

   Columbia, SC 29201.

4. Consider drafting bylaws to further protect and regulate the actions of your corporation. Bylaws are not required in South Carolina.

IRS Registration

1. 

   An EIN is the business equivalent of a Social Security Number.

   Apply for an Employer Identification Number (EIN) by filling out form SS-4. This can be done online by clicking the "Apply Online Now" button at the bottom of the page. Make sure you print out a copy of your application and confirmation page. The confirmation page has your EIN on it. You will need this for every other document you file with the government.

2. Fill out Form 1023 regarding 501(c)(3) nonprofits. You will need the EIN, financial and organizational information for your corporation. The questions on this form are numerous and reference all possible nonprofits, so do not be intimidated.

3. Attach copies of your Articles of Organization to the Form 1023.

Submission

1. 

   You will need proposed budgets for several years out.

   Attach financial statements for the current year and proposed budgets for the next three years to the completed Form 1023 along with your Articles of Incorporation. This is the same information that you filed in Part IX of Form 1023.

2. Formally request exemption using Form 8718, which is available on the IRS website.

3. Make copies for yourself and mail the documents to:

   Internal Revenue Service

   P.O. Box 12192

   Covington, KY 41012-0192

4. 

   Some businesses keep the original Certificate of Incorporation in a safe.

   Wait. You should receive documents in the mail from both South Carolina and the Internal Revenue Service. All documents should be kept in a safe place since they will be referenced by all further tax documents.

Tips & Warnings

• ---Double-check accuracy on all forms.

• ---Double-check that you have signed all forms.

• ---Keep copies of all documents for yourself.

• Nonprofit status is often difficult to acquire and can take quite a long time.

References

• BusinessDictionary.com: Definition for 'Agent of Service of Process'
• South Carolina Secretary of State
• Internal Revenue: Tax Exempt Status for Your Organization
• Internal Revenue Service: Charities and Other Non-profits
• Internal Revenue Service: Tax Information for Businesses

Resources

• Internal Revenue Service
• Publication 557: Tax Exempt Status for Your Organization
• South Carolina Secretary of State
• South Carolina Association of Nonprofit Organizations
• Stay Exempt: IRS Tax Basics for Exempt Organizations