Forming a non-profit organization involves several legal steps to ensure compliance with state and federal regulations. These steps cover everything from naming the organization to filing for tax-exempt status. Below is a guide to help prospective founders meet the legal requirements for launching a non-profit.

Step 1: Choose a Name for the Organization

The name of the non-profit must be unique and compliant with state laws.

• Check Availability: Search the state’s business registry to confirm the desired name is not already in use.
• Comply with Naming Rules: Some states have specific requirements for non-profit names, such as including designators like “Inc.” or “Foundation.”

Step 2: File Articles of Incorporation

To formally create a non-profit, founders must file articles of incorporation with the appropriate state agency.

• Include Required Information: Most states require the name, purpose, registered agent, and address of the non-profit in the articles of incorporation.
• State-Specific Requirements: Some states may require additional information, such as bylaws or an initial board of directors, to be included with the filing.

Step 3: Create Bylaws

Bylaws outline how the non-profit will operate, including its governance structure and internal processes.

• Board Structure and Roles: Define the roles of board members, including their responsibilities and terms of service.
• Decision-Making Process: Specify how decisions will be made, including rules for meetings and voting procedures.

Step 4: Obtain an Employer Identification Number (EIN)

An EIN, issued by the IRS, is required for tax purposes and to open a business bank account.

• Application Process: Apply for an EIN through the IRS website. The process is typically quick and free of charge.
• Uses of the EIN: The EIN will be used for tax filings, payroll, and other business-related activities.

Step 5: Apply for Federal Tax-Exempt Status

Non-profits seeking tax-exempt status must apply under section 501(c)(3) of the Internal Revenue Code or another relevant section, depending on the organization’s purpose.

• IRS Form 1023 or 1023-EZ: Larger non-profits use Form 1023, while smaller organizations with projected annual gross receipts under a certain threshold may qualify for the simpler Form 1023-EZ.
• Waiting Period: After submission, the IRS reviews the application and may request additional information before granting tax-exempt status.

Step 6: Register with the State for Charitable Activities

Many states require non-profits to register with a state agency before soliciting donations.

• State Charitable Registrations: Some states require an annual filing to maintain registration.
• Disclosure Requirements: States may also impose requirements for public disclosure of financial information, such as annual reports or audited financial statements.

Legal Support for Non-Profits

Forming a non-profit involves numerous legal and regulatory considerations. Legal Cali offers guidance to ensure compliance with all necessary requirements, helping organizations get off to a strong start.

By following these steps and meeting state and federal legal obligations, founders can create non-profit organizations that are well-positioned to achieve their missions and serve their communities effectively.