Creating a tax-exempt nonprofit organization is a process with many requirements. The following is a fairly detailed list of steps to take to start an IRS-recognized, tax-exempt, non-profit organization:
-Decide on the cause your non-profit organization will serve.
-Decide on a name for the non-profit organization and search your state’s Division of Corporations records to see if it’s available (and if someone else isn’t using it in your state).
-Identify a minimum of 3 people who have agreed to serve as Directors in the organization. TIP: always have an odd number of Directors (for voting purposes).
-Prepare your organization’s articles of incorporation (the IRS wants specific language inserted here for non-profit organizations; be sure to word it correctly).
-Submit the appropriate filing fee along with the Articles of Incorporation to your state’s Division of Corporations for filing.
-When you receive documents informing you that your organization has been registered with the state, put it in your corporate book (book that contains most of the important documents of the organization).
-Apply for the EIN or have someone else apply for the EIN for you. You will need information from the Articles of Incorporation to apply for the EIN.
-When you receive your EIN, put it in your corporate ledger and take a copy, along with a copy of the Articles of Incorporation, to go to a bank to open a bank account. Apply for a non-profit account: Fees are sometimes lower for non-profit accounts.
-Prepare bylaws that include how Directors/Directors are appointed, and also prepare a Conflict of Interest Policy.
-Have a special meeting of the Board of Directors to adopt the Statutes and the Conflict of Interest Policy, and to appoint the officers of the organization.
-Prepare the federal tax exemption application and mail it to the IRS with the appropriate filing fee.
-When you receive your 501(c) determination letter from the IRS, write it down in your corporate ledger.
-Contact your state to register and get authorization to solicit donations in your state. You must register in every state where you will solicit donations. Failure to register correctly can result in fines, penalties, and the loss of your ability to solicit donations.
-Register the authorization to request donations in your corporate book.
-Check your organization’s name to protect the goodwill created from your hard work.
Note: Talk to a lawyer if you have legal questions.
