How to Start a Nonprofit Organization - 501c3 Organization

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how to form a 501c3 nonprofit

corporation a nonprofit corporation is

Purpose Driven a company whose goal is

not to make profit for themselves

typically they are an organization that

wants to make money in order to help

further a social cause or provide a

public benefit 501c3 nonprofit

corporations are tax-exempt allowing

them to maximize the amount of funds

being put towards a social benefit or

cause but do you need to form a

nonprofit corporation just because you

want to raise money for a person or

organization doesn't mean you need to

form a nonprofit corporation you can run

one time charity events to raise money

without needing to be a nonprofit

corporation running something like a

charity auction or raising money to

donate to an organization are informal

examples if you have long term goals for

your nonprofit then forming a nonprofit

corporation may be more suitable as it

will provide certain benefits such as

limited liability protection and

enhanced ability to raise funds and

apply for grants and discounted rates on

stamps as well as certain marketing and

advertising costs you will also receive

tax exemptions once you obtain 501c3

status how do you form a non-profit

corporation there are two ways you can

do it yourself or you can hire a service

to do it for you let's take a look at

both options and help you decide how to

go about forming your own nonprofit

corporation option 1 do it yourself if

you want to save money you can form a

non-profit corporation on your own let's

take a look at the six steps to forming

a nonprofit corporation on your own 1

choose and secure your nonprofits name

the name you select for your nonprofit

will establish its brand it's the first

thing that most people will learn about

your organization it's important to pick

a name that both aligns with your

mission and follows the rules of the

naming guidelines in your state you'll

need to check your state specific naming

requirements but in general follow these

rules when choosing a name the name you

pick for your organization should not

include any words or terms that could be

considered grossly offensive or

misleading the name must be distinct

from that of any other corporation in

your state for more information on what

makes a name distinct check out our

other video how to name your business

linked below

once you have a name selected do a name

search to make sure it's available in

your state

doing a state name search you'll want to

do a domain search to see if your name

is available as a URL even if you don't

plan on making a website today you may

want to secure the URL so someone else

doesn't take it to a point a registered

agent the registered agent can be an

individual within the company including

yourself or you can hire a professional

service authorized to do business in

your state they will send and receive

legal papers on your behalf

these documents include official

correspondence like legal summons and

document filings which your registered

agent will receive and forward to you

your registered agent will also help

remind you to file the necessary reports

failure to properly maintain your

nonprofit can result in fines and

dissolution so this assistance is

valuable 3 select directors and officers

your nonprofit corporation will be made

up of some number of Directors and

officers this number will vary by state

so check out our other state pages

linked in the description below for your

specific state the directors of a

non-profit are responsible for

overseeing the operations of the

organization together they form the

board of directors the power and

influence of the directors over the

organization comes from them as a board

the directors themselves do not have any

authority as individuals the board

typically creates the policies that

govern the nonprofit they also oversee

management level hiring such as the

company officers the officers of a

non-profit such as the President or

secretary are individuals with

responsibilities and the authority to

execute based on their job description

together the officers on the board will

come together to make up the

organizational structure of your

nonprofit an officer may also be on the

board of directors and served wealth

roles if allowed to do so by the

organizational bylaws which we will

discuss later if your organization plans

to apply for 501c3 status for federal

tax exemptions it must elect at least

three directors not related to each

other for file the certificate of

formation to form a nonprofit

corporation you will need to file

official papers with the state the

paperwork e-file varies by state and is

most commonly called the Articles of

Incorporation some possible information

and Articles of Incorporation you may

have to include is entity type entity

name principal office registered agent

and registered office incorporator

members distribution of assets

effectiveness of filing or supplemental


this varies greatly by state so be sure

to check your specific States

requirements 5 operating procedures and

housekeeping once your nonprofit

corporation has been formed you'll want

to start getting the structure of it

together and determine how your

nonprofit will be run starting with the

bylaws and conflict of interest policy

your bylaws are the rules that determine

how your organization will be governed

and run you can think about it as a

constitution for your nonprofit it makes

the rules and priorities clear for

everyone involved in your bylaws be sure

to include how the nonprofit will be

governed the roles of directors and

officers how meetings are held voting

procedures electing officers or

directors how records will be kept and

managed how disputes will be handled and

how bylaws will be added and amended in

the future when you're ready to get

started check out some bylaws templates

linked in the description below

the conflict of interest policy are the

rules set to ensure that decisions being

made for the nonprofit are based on what

is best for the organization and not

being motivated by what is best for

individuals you'll want to make sure you

have a draft of both the bylaws and

conflict of interest policy before your

organizational meeting we have templates

of both bylaws and conflict of interest

policy linked in the description below

an organizational meeting is the first

official meeting of your nonprofit some

of the things that are discussed in a

typical organizational meeting are

taking attendance to show you have a

quorum appointing temporary officers and

chairmen adoption of bylaws and adoption

of conflict of interest policy it's

important to record minutes of the

meeting and have it signed by all

attending directors we have some

corporate minutes templates linked below

to help you get the ball rolling after

your nonprofit has been formed you'll

need to apply for an EIN or employment

identification number an EIN is like a

social security number for your

nonprofit and is used for things like

filing for 501c3 status opening a bank

account applying for tax-exempt status

and submitting tax returns for more

information on ains check out our other

video linked below depending on your

state you may also need to apply for a

state tax identification number you will

use this for submitting state income and

sales tax is applicable for your

organization 6 apply for 501c3 status

federal tax exemption what is federal

tax-exempt status and why do you want it

when a corporation gin

rates income that corporation has to pay

a federal income tax as a non-profit

your goal is to generate income that is

used to help further a cause rather than

fill the pockets of the company

employees because of this the federal

government allows that nonprofits income

not be taxed so that more of the money

can go towards the cause that the

nonprofit is supporting before your

nonprofit can apply for 501c3 status it

must file the articles of formation with

the required provisions adopt the bylaws

and conflict of interest policy and have

an EIN number in order to file for tax

exempt status most organizations will

need to file form

10:23 online or by mail and pay a fee of

$600 if your organization's annual gross

receipts are below $50,000 then you may

be able to file form 10 23 easy with a

fee of $275 you can check your

eligibility with the link in the

description below to apply for state tax

exemption you'll need to find your state

specific requirements option 2 the

second way to form a non-profit is to

hire a professional service to create

your nonprofit for you hiring a

professional service to file your forms

and act as your registered agent for the

nonprofit will cost you an additional 50

to 150 dollars this V only covers

formation of a nonprofit corporation if

you wish for the professional service to

file for 501c3 status the cost may go up

to as much as seventeen hundred dollars

plus filing fees however there are

several benefits to working with a pro a

higher registered agent helps with

getting your reports filed on time helps

you stay organized by keeping your

business mail separate and is available

at all regular business hours to accept

official mail and legal papers on your

nonprofits behalf if you want to form an

organization or company with the purpose

being to help a cause rather than to

make a personal profit a nonprofit

corporation is the best way to do that

now you know all the steps to form a

non-profit for a more detailed guide

visit our site at startup savant com

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