As a given when forming a Non-Profit in Delaware, you should name your organization. This means that the name should not be the same as any existing organization registered in the Secretary of State of Delaware records.
Additionally, your Delaware Non-Profit name should have any one of these words: ‘Company’, ‘Corporation’, ‘Association’, ‘Foundation’, ‘Club’, ‘Incorporated’, ‘Institute’, ‘Society’, ‘Fund’, ‘Union’, ‘Limited’, ‘Syndicate’, or any of the following abbreviations, ‘Corp.’, ‘Co.’, ‘Ltd.’, or ‘Inc’.
Once a name has been selected, check this with the Delaware business name search tool to ensure that there is no existing duplicate. You can reserve your name by filing a Name Reservation Application to the Division of Corporations of Delaware. A filing fee of $75 is required. Once you have filed the application, the name is reserved to your Non-Profit for 120 days.
When starting a Non-Profit organization, you need to elect a set of Delaware Non-Profit officers and directors.
For your Non-Profit to qualify for this requirement, at least one director should be elected to your board.
The services of a qualified Delaware Registered Agent is another requirement as well to forming a Non-Profit in the state. This professional is your organization’s representative to receive legal paperwork from the state.
Your Agent can either be an individual or business entity, provided that she/he is registered to operate in Delaware. Also, the individual should also have a physical address in the said state.
You can hire a Registered Agent service and pay up to $160/year, or get a Delaware Registered Agent free of charge when you incorporate your Non-Profit with IncFile.
To legally elect your Non-Profit organization, you need to file a Certificate of Incorporation for a Non-Stock Corporation. Your Corporation’s name, complete address, Corporation’s purpose, and conditions for membership is information your Non-Profit will use.
Instructions are provided before the actual form so make sure to note this to avoid any errors upon submission. When you have completed the form, you can file the form together with the filing fee through mail.
Your article will not automatically qualify you for federal and state exemptions, so that the following languages should be included in the articles when filing:
The first board meeting is the organizational meeting with your newly chosen board of directors. At this meeting, the following agenda are discussed and resolved:
A minutes of the meeting should be created outlining all the matters discussed during this meeting.
A Corporate Records Binder contains all Non-Profit documents and paperwork. This includes: Your Delaware Non-Profit registration papers, business license, tax compliance requirements, and minutes of meetings.
A Corporate Records Binder serves an important part in your Non-Profit because it keeps order in all your paperwork. This binder can be purchased at a local store or through Amazon.
A Delaware Non-Profit EIN is required for all businesses to operate legally in the state. This EIN is the social security number equivalent of an individual.
For every business transaction your Non-Profit conducts, an EIN is an indispensable entity. You can apply for an EIN number for Non-Profit at the IRS website.
The next step to starting a healthy Delaware Non-Profit, put your profits and assets where they belong. Do this by opening a separate checking account for your business.
There are many options for opening a business checking account like Chase, Bank of America, or Citibank. Be sure to do your research and decide which is right for you. If you’d like a look at our favorite 3, see this review.
The next crucial step for your Non-Profit is to apply for exemptions of the Delaware Non-Profit tax registration. You have to apply for exemptions at the federal and state level, but this does not exempt you from registering for Non-Profit taxes. So here are the steps:
To qualify for a federal tax exemption status, your Non-Profit must file a Form 1023 or the Application for Recognition of Exemption. Before the actual form, a lengthy instruction is provided to ensure that you fill out all the entries correctly.
Fill out each entry carefully as well because this is a rather long form. If you are a small Non-Profit with a yearly gross receipts not greater than $50,000 and net assets of not more than $250,000, you can opt to use the streamlined Form 1023-EZ. As compared to Form 1023, this form is shorter and much less complicated.
As each state has different rules, make sure to visit the Division of Revenue of the state of Delaware website to see which taxes you are exempt from. You do not need to file for exemption of Corporate income tax though as you are automatically exempted as soon as you receive the 501(c)(3) status with the IRS.
Each state has different registration rules and reporting for Non-Profits, so make sure to know the details for this state. Delaware does not impose registration for fundraising activities. However, if you are soliciting or fundraising outside of Delaware, you may be required to process additional requirements.
After registering your business in Delaware and taking care of your taxes, you need to figure out which license or permits you will need to operate.
This step depends on the location of your business and the industry, so do your research. Either visit the SBA website to learn more or have professionals handle all research on your behalf with this reliable service.
Now that you have followed the steps above, you are an official Non-Profit organization in the state of Delaware. Other than those steps based on state guidelines, here are 2 extra steps based on best practice for starting a successful organization. Not required, but highly recommended.
A business plan is an indispensable tool for your Non-Profit as it provides the basic building blocks to the future of your organization. While it may not be required, a business plan is important to a business’ progressive growth.
You can write a business plan even if you are not an expert writer. As long as you know your business inside out, you can translate this into writing. And with a few tips from the resources below, you’ll have your business plan in no time.
Nowadays, it is important to build trust through a business website. Since I don’t have crazy technical experience and you probably don’t either, I recommend building a website on WordPress.
WordPress is free, easy to use, and customizable. No need to hire a custom web developer. See how to get started through this step-by-step guide.
Please understand that this article is only an informational guide, and it should be taken as such. It is not by any means a legal advice. Only the expertise of a lawyer should be relied on for specific details on starting a Delaware Non-Profit organization.