The first thing that you have to remember when naming your Virginia Nonprofit is to make sure that it is distinguishable from already registered business names filed before the Virginia State Corporation Commission.
To check for business name availability, you can use the Virginia State Corporation Commission’s Business Name Search Tool. You may also reserve your business name if you want to prevent other nonprofits from using it. To learn about business name restrictions further, you can read the Virginia Code §13.1-829.
In Virginia, you are required to appoint one or more directors as board members. You also have to appoint the officers of your nonprofit as the incorporator.
Your directors and officers must be 18 years old and above and must be residents of Virginia. All the names of your board of directors should be included in your articles of incorporation.
Nonprofits are required by Virginia law to appoint and maintain a registered agent who will accept important documents and paperwork issued by the state or any other entity.
A Virginia Registered Agent must be an individual or a business authorized by Virginia to conduct its operations within the state.
To form your Virginia Nonprofit, you need to file your articles of incorporation as a nonstock corporation before the Virginia State Corporation Commission. The following information must be included in your articles of incorporation:
You can obtain the articles of incorporation form for a nonstock corporation at the Virginia State Corporation Commission’s website. Make sure to follow instructions accurately and submit the form personally or through postal mail; online application is not accepted.
The articles of incorporation form by the Virginia State Corporation Commission has very little information. It does not include the language required by the Internal Revenue Service to get a 501(c)(3) federal tax-exempt status. To obtain the latter, you need to include the following languages in your articles:
You can read the IRS requirements for tax exemption further by checking out the IRS Publication 557, Tax-Exempt Status for Your Organization on the IRS website.
The first board of directors meeting or the organizational meeting is held to discuss the following nonprofit agenda:
During the meeting, everything must be documented properly. Don’t forget to have your minutes signed by your directors. After you’ve accomplished everything, you can keep it in your corporate records binder.
Your Corporate Records Book or a Corporate Records Binder is where you’ll keep all pertinent documents and paperwork related to your Virginia Nonprofit.
Examples of documents include your articles of incorporation, bylaws, forms, registrations, minutes of meetings and other resolutions. You can buy it in your local office supply or you may place a direct order from Amazon.
Nonprofits are also required by Virginia law to obtain an Employer Identification Number (EIN). It is a 9-series identification number that allows the IRS to keep track of your state taxes and activities.
An EIN is also used in almost all of your business transactions: from applying for a business bank account, filing for income tax returns, hiring employees and a lot more. Before you operate your nonprofit, make sure that you have an EIN. Get your EIN now at the at the IRS website for free.
A business bank account is essential so you will be able to separate your personal and nonprofit finances and vice-versa. It will also help you keep track of donations and funding given by benefactors. Transactions are recorded in real time so everything is organized and you will never get blindsided.
Recommended Resource: Read this roundup to help you choose which type of business bank account is best for you.
You’re finally done with the formation of your Virginia Nonprofit. You can now proceed to the next process which is obtaining your federal and Virginia state tax exemptions. Follow the following steps below:
The Form 1023 or the Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code must be accomplished to get a tax exempt status. It is a comprehensive form that requires a lot of information including your nonprofit history, nonprofit finances, organizational structure, nonprofit policies and nonprofit activities. After filling out the form, check for inconsistencies and send it to this address:
Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192
If you have annual gross receipts of less than $50,000 in a year and assets of lower than $250,000, you can file the Form 1023-EZ, Streamlined Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code instead because you are considered eligible as a small nonprofit.
The Form 1023-EZ is less comprehensive and does not need a lot of information. Prepare a filing fee of $850 for the form 1023 and $400 for IRS Form 1023-EZ.
Virginia Nonprofits who are awarded a 501(c)(3) tax-exempt status from the Internal Revenue Service are automatically exempted from filing Virginia’s income tax. If you want to learn more about filing requirements for exemptions on other state taxes, you can visit the Virginia Department of Taxation website.
Fundraising activities in Virginia are subject to review by the state and some of the major considerations include the size and intended activities of your Virginia startup. The Virginia Department of Agriculture and Consumer Services (VDACS) and the Office of Consumer Affairs will be able to educate you more on the mechanics of fundraising. They also have available forms and registration requirements.
There are specific business licenses that you need to obtain inorder to operate legally in Virginia. By obtaining them, you adhere to the standards set by the state. Here’s a complete list of Virginia business licenses.
Understand Virginia tax regulations, taxes and business owner obligations further by visiting the business section of the Virginia Department of Taxation. For local business licenses, check out Virginia’s one stop online registration tool.
Recommended Resource: Business licenses vary from county to county. For professional assistance, you can check the business research license package. Use the SBA’s roundup resources as well.
Great job, you’re now finally a Virginia Nonprofit! But before you start operating, you need to remember to get these two non-mandatory, additional requirements done.
You might be wondering why you need to write a business plan when you’re not doing business. A business plan can still be a helpful tool to accomplish your goals and mission. You will have an idea how to execute your plans of action because you have a guide, a detailed blueprint.
If you want to start writing a business plan for your nonprofit, you can check out the resources below. They’re very reliable tools for business plan writing.
Modern entrepreneurs believe that business websites are powerful tools which will help them succeed in the industry.
It allows you to reach a wider market, create innovative marketing strategies and relay your company message better. Apart from this, a business website also helps you make your business accessible and reachable.
Good thing building a business website is easier today with tools like WordPress which enables you to build and customize a business website in just minutes. Bluehost is also another great tool that features a one-click WordPress installation tool and customer support feature.
Resource for Getting Started: You can also use this step-by-step guide to help you get started.
The article is only an informational/instructional guide and should not be considered a legal advice or a legal document. If you have any questions on the legalities of starting a nonprofit in Virginia, you should consult your lawyer for professional legal advice.