When naming a nonprofit in Indiana, you need to include the following words after your business name: corporation, incorporated, limited or company. You can also opt to use the abbreviation for each of these words.
Your Iowa Nonprofit’s business name should not be similar to any existing name registered before the Indiana Secretary of State. To check for business name availability, you can use the Indiana’s business name search tool.This tool is provided by the Indiana Secretary of State.
Appointing officers and directors for your Indiana Nonprofit is a mandatory requirement. Corporate officers are important because they will execute corporate goals and mandates made by your Board of Directors who are in charge of discussing and making decisions for your nonprofit.
In Indiana, you must appoint three or more directors to serve in your board. They must be of legal age and must be residents of Indiana. The names of your directors should be included in your nonprofit articles of organization.
Nonprofits in Indiana are still required to designate and maintain a registered agent. Your agent can be an individual or an entity authorized to conduct business in Indiana.
Upon appointment of the position, your agent must accept the responsibility of receiving documents and paperwork on your nonprofit’s behalf.
An Indiana Nonprofit is formed with the filing of a nonprofit articles of incorporation before the Indiana Secretary of State. The articles of incorporation form can be found the Secretary of State’s website. You can download the form, fill it out and submit through postal or your can also do it online. Make sure to follow the instructions when completing your articles to avoid any delay or problems.
Include the following information in your articles of organization: “this corporation is a public benefit corporation. Additional information that you need to include are the stress address of your nonprofit, name and address of your registered agent, name and address of incorporator and whether there are other members of your nonprofit or not.
Apart from the requirements by Indiana state law, there are specific provisions that you have to include to meet the requirements set by the IRS to be granted 501(c)(3) federal tax-exempt status. Some of the languages include:
Check out the IRS requirements for tax exemption at the IRS Publication 557, Tax-Exempt Status for Your Organization on the IRS website.
Also known as the organizational meeting, the first board meeting is set to discuss the following important agenda:
Don’t forget to create a minutes of the meeting. Have it signed by your board of directors and keep it in your corporate records binder for safekeeping.
A corporate records binder must be set up in order to keep all important documents and paperworks in one file. This is where you’ll place registration documents, tax receipts and forms, business licenses and permits, minutes of meetings and other resolutions.
The corporate records book can be bought at your local office supply or you can buy it from Amazon and have it shipped directly.
Indiana Nonprofits are required by law to get an Employer Identification Number (EIN). Your EIN is a 9-series identification number that enables the IRS to monitor your business activities and state taxes.
It is also used in a variety of transactions such as applying for a business bank account, filing for income tax returns, hiring employees and many others. Obtain your EIN at the IRS website for free.
Separating your personal and nonprofit assets is essential to maintain healthy financial management. To do this, you need to open a business bank account where you’ll place all your donations and funds generated from charitable and fundraising activities. Having a business bank account is an advantage because you’ll be able to keep track of your finances better and all transactions are recorded in real time.
Recommended Resource: You can read this roundup to better understand the different business bank account options. Choose the best one for your Iowa Nonprofit.
The Form 1023 or the Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code must be completed to be granted a tax exempt status. It’s one comprehensive form that will require you to prepare a lot of information.
This includes your nonprofit history, nonprofit finances, organizational structure, nonprofit policies and nonprofit activities. Once the form is completed, check it for inconsistencies and submit it to this address:
Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192
On the other hand if you have annual gross receipts of less than $50,000 and assets of lower than $250,000, you can instead complete the Form 1023-EZ or the Streamlined Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. When you meet all the criteria mentioned, you are qualified as a nonprofit, therefore, you can use the Form 1023-EZ.
The Form 1023-EZ doesn’t need much information. Make sure to prepare a filing fee of $850 for the form 1023 and $400 for IRS Form 1023-EZ.
After obtaining a federal tax exemption, proceed by getting an Indiana state tax exemption. All you have to do is provide the Indiana Department of Revenue with your IRS Federal Determination letter containing proof that you are indeed exempted from federal tax.
If you want to have a sales tax exemption, you can submit a form of Nonprofit Application for Sales Tax Exemption (Form NP-20A) before the Indiana Department of Revenue. To continue enjoying a sales tax exemption, you have to file a Nonprofit Organization’s Annual Report every year.
For further information about tax exemptions on income, property, sales and others, you can visit the Indiana Department of Revenue website
Compared to other states, the good thing about Indiana is that the state does not require nonprofits to register anything if they want to solicit contributions from any means as long as it’s not illegal. You can plan and do charitable activities without having to worry about anything.
Obtaining your Indiana business licenses is a mandatory requirement even for nonprofits. By following this, you adhere to the standards set by Indiana for entities operating in the state. To understand the Indiana business licensing better, you can check out this business owner’s guide in starting a business prepared by the Indiana state government.
Recommended Resource: Business licenses are different from city to city or county to county. It is best to seek professional assistance, you can check the business research license package.
Pat in the back, you’re finally an Indiana Nonprofit! But before anything else, make sure that you comply with these two additional requirements. These steps are not mandatory requirements but they’ll surely make a big difference in your business.
A business plan is important for your Indiana Nonprofit because it enables you to lay out your course of action in an organized manner. It will also help you achieve your goals better because everything is thoroughly studied and placed on paper. Writing a business plan will also enable you to develop strategies and methods as to how you’ll reach your objectives.
If you want to start writing a business plan for your nonprofit, you can check out the resources below.
Business websites are especially a must for nonprofits because the message and mission of an organization is highly essential to keep it running. For the public to know what you aim for, you need to have a professional and fully functional business website.
Building a business website is easy with tools like WordPress which enables you to build and customize a business website in just minutes. Bluehost is also an excellent tool featuring 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 Indiana, you should consult your lawyer for professional legal advice.