When forming a Non-Profit in Michigan, you should pick a business name that is uniquely different or does not closely resemble any existing entity registered with the Michigan Department of Licensing and Regulatory Affairs.
You can easily validate the availability of your Michigan Non-Profit name through the Michigan business name search database.
Starting a Michigan Non-Profit requires that you elect at least three directors for your organization.
The Michigan Non-Profit officers and directors will help determine the initial goals of your Non-Profit and assist in making the initial decisions as regards to several key aspects of your organization.
As part of state requirements, you are to retain the services of a Michigan Registered Agent. This position can be filled by an individual who is a resident of the state or a business entity registered to do business in Michigan. The Registered Agent should be able to provide a physical street address in Michigan.
Also, the Registered Agent in Michigan should consent to accept service of process or any legal notices on behalf of the Non-Profit before designation. Rocket Lawyer can help you secure a reliable Registered Agent and become compliant.
A Non-Profit Articles of Incorporation should be filed to the Michigan Department of Licensing and Regulatory Affairs. Instructions as to how to fill out the form are provided in the actual form, so read it first.
Aside from the standard information about your business, its Registered Agent, and the incorporators, there are several specific languages that must be included. These languages are required so you can receive a 501(c)(3) status from the IRS. These languages include:
As soon as you are organized, schedule an initial meeting with your Non-Profit directors to decide on crucial matters, such as:
Minutes of this meeting should be recorded, signed by the attendees, and filed under the Corporate Records Binder.
A Corporate Records Binder is an organization file where you keep documents such as your Michigan Non-Profit registration paperwork, copy of business licenses and permits, copy of the Articles of Incorporation, minutes of the meeting, and all other documents pertinent to your Non-Profit.
A Corporate Records Binder can be purchased at an office supply chain. Alternatively, you can buy it through Amazon.
A Michigan Non-Profit EIN is still required even if you are a Non-Profit organization. You do not necessarily have to be hiring employees either to process this requirement since an EIN is mandatory for all businesses.
An online application at the IRS website is the easiest way to obtain your EIN.
By opening a business bank account you will be able to keep your personal and Michigan Non-Profit finances separate. This way, you can ensure that all your personal assets will not be mixed up with your business assets. If that happens, it would be very difficult to determine whether you are making or losing money as a business.
To find out which is the best bank to open an account with, do some research. You can use the bank you keep your personal account with, just be sure to keep transactions 100% separate.
As a Non-Profit organization, you are still required to file for Michigan Non-Profit tax registration. Although you are registering for Non-Profit taxes, there are also several taxes in both federal and state levels that you will be exempted from. To get started on your tax exemptions, here are some steps to follow:
Federal tax exemption status from the IRS can be availed by filing a Form 1023, Application for the Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Before you file this form, make sure that you comprehensively read the instructions provided on the form itself because it is quite a lengthy and highly detailed document.
As an alternative to this form, you can also use Form 1023-EZ, Streamlined Application for the Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. To qualify for this tax form, estimated annual gross should not exceed $50,000 and total worth of assets should not exceed $250,000. In short, smaller Non-Profits are qualified to use this form.
Exemption from federal taxes also automatically exempts your Non-Profit from the state income tax of Michigan. You are also automatically exempted from sales tax and use tax in Michigan. For more information on Michigan tax exemptions for Non-Profit organizations, you can visit the Michigan Department of Treasury.
Additional regulatory requirements and reports may also be required of your Non-Profit depending on factors such as the nature of your activities and its size, so be sure to visit the Attorney General’s website of Michigan.
After officially registering your business in Michigan and taking care of your tax obligations, you will need to figure out which license or permits you will need to operate legally.
This step depends on the location of your business and the industry, so do your research. To get started, 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 Michigan. Other than those 10 steps that are based on state guidelines, here are 2 additional steps based on best practices for starting a successful organization. Not required, but highly recommended.
Now that you have finally formed your Non-Profit, the next steps will be as crucial to its future. Keep in mind that a business is as good as the solid foundation on which it was built on.
To ensure that your business thrives in the long run, make sure that you have a winning business plan in place. To help you further, you can use the resources below as well.
Trust is everything when you’re starting a business in Michigan. One of the best ways to build trust with your potential customers is to have professional website that explains who you are and what you sell.
With WordPress, you can start a website for your Non-Profit in minutes and have no need to hire a professional. Learn how through this free step-by-step guide.
Note that this article is just an informational guide. This should not be taken as legal advice. For the legalities involved in starting a Non-Profit organization in Michigan or the specifics on Michigan Non-Profit organizations, consult the expertise of a business lawyer at all times.