There’s a simple rule when it comes to naming your non-profit; it should not be similar to any existing nonprofit names for you to be allowed to use your chosen name.
Make sure that your chosen name is not take by checking for its availability using the New Mexico business name database in the Secretary of State’s website.
To start forming your New Mexico non-profit, you need to appoint initial directors. In the state of New Mexico you have to choose three or more directors.
Your appointed initial directors must be named in your Articles of Incorporation.
A mandatory requirement in New Mexico, regardless of entity type is to designate and maintain a registered agent. Your New Mexico Registered Agent is a third party professional who receives or accepts documents on your behalf. There are three basic things that you need to look for in a registered agent. Here’s a list of them.
If you’re looking for a reliable registered agent service for your nonprofit, you can check out Rocket Lawyer.
The next step to form your nonprofit is to file a certificate of incorporation for nonprofits before the New Mexico Secretary of State. Some of the basic information that will included in your articles of incorporation include the following:
The nonprofit articles of incorporation can be found in the Secretary of State’s website. You can complete the process of filing as the instructions are provided in the same website.
Apart from the nonprofit articles of incorporation, you also need to obtain the IRS’s 501(c)(3) federal tax exempt status. To be awarded of this status, you need to have some additional specific language in your articles of incorporation. They include the following:
If you need more information about the IRS requirements for your tax exemption status and a sample language, you can check out the IRS Publication 557 at the IRS website.
Even if you’re status is a non-profit, you still need to follow formalities such as setting up a board meeting together with your board of directors. In the organizational meeting, you need to agree on the following:
Make sure that you are able to create the minutes of the board meeting and keep in on record for future references.
Your corporate records book also known as your corporate records binder is essential so you can keep pertinent documents such as your articles of incorporation, non-profit bylaws and the minutes of every board meeting. It is important that you set this up prior to starting any kind of business activity.
You can gain access to your binder by visiting your local office supply shop, or, you can also purchase one through direct order at Amazon.
An Employer Identification Number (EIN) is a requirement when starting a New Mexico non-profit organization.
Your EIN is needed in almost every transaction or business activity so you need to prepare this ahead of time. You can your EIN for free at the IRS website.
While starting a New Mexico Non-Profit, it’s important to keep your business and personal bank accounts separate. This keeps your personal liability at a minimum and makes tax time much more simple.
For a close up look at the best places to open a business checking account for your Non-Profit, visit this quick roundup.
After you’ve created your New Mexico non-profit, the next step is to file your application federal and state tax exemptions. The steps are as follows:
To be given the federal tax-exempt status by the IRS, you have to fill-out and submit your Form 1023. This is quite a comprehensive form and you may need to prepare a lot of information which includes the following: history of the organization, finances, structure, operational policies, to mention a few.
Smaller non-profits on the otherhand are allowed to file form 1023-EZ otherwise known as the Application for Recognition of Exemption of section 501(c)(3) which is part of the government’s Internal Revenue Code. To be eligible for this, small nonprofits have to meet two requirements: an estimated annual gross of smaller than $50,000 and a total asset of less than $250,000.
After you’ve obtained a tax exempt status from the Internal Revenue Service, you are now officially free from corporate income and franchise tax. For further information about additional state taxes and requirements, you can check out the New Mexico Taxation and Revenue Department.
You also need to consider some other additional requirements when starting a non-profit. One of them includes registering organizational activities such as fundraising or charities before the New Mexico Attorney General’s office. This will also depend on the size of your non-profit as well as the kind of activities that you’re about to conduct.
To be well-informed of the rules and regulations that you have to follow regarding these activities, you can go to your New Mexico Attorney General’s website for more information.
As part of your requirements when starting a business in New Mexico, you are required to comply with the appropriate business licenses and regulations. These licenses are set at the local, state, and federal levels, and depend on a number of factors.
For more information visit the SBA or have professionals find out what your specific requirements are through this reliable service.
Now that you have followed the steps above, you are an official Non-Profit organization in the state of New Mexico. 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.
A non-profit organization also has its own goals and objectives even if it’s not directly related to business. To be able to achieve your goals with efficiency, a business plan is a powerful tool that will guide you in the right direction.
If you want to see favorable results and start writing your business plan, here are two resources that I highly recommend.
This sums up just about everything! Once you are able to understand the entire process, there’s no doubt that you’ll be able to process the formation of a non-profit organization on your own.
The next step when starting a New Mexico business is to build a professional website. A website is great for building credibility and trust with your future customers.
Without hiring a web designer or building everything yourself with code, WordPress is my favorite option. It is free, easy to use, and you can learn how to get started with this free guide.
The main purpose of this guide is to give you instructions on the process forming a non-profit. This article should not be used as a legal document or a replacement for legal advice. For the specific legalities, you can speak with an attorney.