The first step to form your Pennsylvania Nonprofit is to make a name for it. Make sure that your business name is distinguishable from those used by other businesses regardless of entity type. After your business name, you have to attach one of these words or abbreviations: association, company, foundation, institute, co., inc. and ltd.
To check for the availability of your chosen nonprofit name, you can use the Pennsylvania Secretary of State’s business name search tool. For more information about the name restrictions in Pennsylvania, check out the Department of State website.
Nonprofits are required to have at least one board of director to be allowed to operate. Your appointed board of director has to be 18 years old or older. You can designate anyone even if the director is not a resident of Pennsylvania.
Apart from your directors, you also have to appoint officers into your nonprofit. Like your directors, they also have to be 18 years old or older. Your officers have to be residents of Pennsylvania. Once you’re done appointing officers and directors, you must include them in your certificate of incorporation placing their complete names and mailing address.
Designating and maintaining a Pennsylvania Registered Agent is a mandatory requirement in the state of Pennsylvania even if you’re a nonprofit organization.
Some of the basic requirements when hiring a Pennsylvania Registered Agent include: being a resident of the state, having a physical office and availability during business days and hours.
Registered agent service fees vary, however, you can pay as much as $160 every year. However, if you incorporate your Pennsylvania Nonprofit with IncFile, you will be able to save a lot because you can take advantage of a free registered agent service for one full year.
To form your Pennsylvania Nonprofit, you have to file your Articles of Incorporation before the state. Obtain the forms, read the instructions and make sure to fill out the entries correctly. Some of the information that you may need to prepare include the following:
You can visit the Department of State website to download your articles of incorporation form. The filing fee is $125. Filing can be done online or through postal mail. If you prefer the latter, send your articles of incorporation in this address:
Department of State
PO Box 8722
Harrisburg, PA 17105-8722
Even if you’ve filed your articles of incorporation, you will not automatically be granted an 501(c)(3) tax-exempt status by the Internal Revenue Service. You still have to apply for this yourself along with the specific languages that you need to include which are as follows:
To know more about this, you can check out the requirements for tax exemption at the IRS Publication 557, Tax-Exempt Status for Your Organization.
Also called the organizational meeting, the first meeting of the board of directors is important because this is where you will discuss the following important agenda:
A minutes of the meeting must be prepared. Have it signed by all your board of directors and should be kept in your Corporate Records Book.
Your Corporate Records Book also called your Corporate Records Binder is not a requirement but if would be best to keep one for your nonprofit. A Corporate Records Books is where you’ll keep almost every important document from your legal documents, paperwork, minutes of your meetings, forms, tax registrations and many more.
You can purchase your records book at your local office supply store or you can order directly from Amazon and have it shipped.
An EIN is mandatory requirement even if you’re forming a nonprofit. It also serve many purpose so you have to obtain it before you operate your nonprofit. The EIN enables the IRS to monitor your nonprofit activities. You can obtain your EIN before the the IRS website for free.
In a nonprofit, you will conduct activities and charity events that will generate money for your cause or mission and you will also be able to receive donations. To make sure that this doesn’t get mixed with your personal money, you need to open a business bank account to separate everything.
Recommended Resource: Check out this roundup to help you decide which type of business bank account is the right fit for your Pennsylvania Nonprofit.
To get a tax exempt status from the Pennsylvania government, you need to apply and get approved. Below is a step-by-step process of applying for federal and tax exemptions.
To start your application, obtain the Form 1023 or the Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code and complete the form accurately.
This form is very comprehensive and you may be asked a lot of information such as the background of your nonprofit, your finances, the organizational structure and even the rules and policies governing your Pennsylvania Nonprofit.
Smaller nonprofits may file an alternative Form 1023-EZ or the Streamlined Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. Eligibility requirements include: an overall income of less than $50,000 and assets of lower than $250,000.
You can send your application in this address:
Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192
Prepare a filing fee of $850 for the form 1023 and $400 for IRS Form 1023-EZ.
After filing for federal tax exemption, the next thing to do is apply for tax exemption in the state of Pennsylvania. To do this, you have to submit a Form REV-72 before the Pennsylvania Department of Revenue along with your copies of your 501(c)(3) Determination Letter from the Internal Revenue Service, Articles of Organization, Corporate Bylaws and financial statements. This process is completely for free. You may submit your application in this address:
Department of Revenue
Bureau of Business Trust Fund Taxes
Miscellaneous Tax Division
Harrisburg, PA 17128-0909
You can also qualify for other tax exemptions, inquire before the Pennsylvania tax agency to know more about this.
There are additional requirements to comply depending on the size, nature and activities of your Pennsylvania nonprofit. If you want to hold fundraising activities, you can check the Bureau of Corporations and Charitable Organizations for more information regarding the registration requirements.
A Pennsylvania Nonprofit is still required by law to obtain licenses and permits before it can legally operate in the state of Pennsylvania. Your nonprofit business licenses and permits will depend on the size and nature of your Pennsylvania Nonprofit.
Recommended Resource: If you need professional assistance to compile applicable licenses and permits, you can use this resource roundup provided by the SBA.
Writing a business plan is not a mandatory requirement when starting a nonprofit in Pennsylvania, however, it’s best that you make one for your nonprofit. You might ask, why do I have to make a business plan when I’m not operating a business?
A business plan is not just meant for companies doing business, it is also highly useful for a nonprofits like you. It allows you to set your goals and objectives clearly and create strategies to achieve them. A business plan is a blueprint that will enable you to operate your nonprofit well.
A website is essential if you’re running a nonprofit because it allows you to relay your mission and goals better to the public. There are plenty of website building tools that you can use these days so you don’t have to worry about anything.
WordPress is an example; it is a free web building tool that allows you to create a website in just minutes. Bluehost another excellent software has features such as a one-click automatic WordPress installation and a 24 hour customer support service.
Resource for Getting Started: You can start building your business now with this this step-by-step guide to help you.
Please note that this article is made for informational/instructional purposes only. It should not be considered a legal document or a legal advice. For specific questions about starting a nonprofit in Pennsylvania, you can consult your lawyer for legal advice.