There’s no rule being followed when naming a nonprofit in North Carolina, however, you need to make sure that it’s a unique name that does not confuse the public. Your chosen nonprofit name must also be distinguishable from other nonprofit corporations or any other business entity.
When naming your nonprofit, include the words or abbreviations, “corporation”, “incorporated”, “company”, “limited” or “corp.” or “ltd.” You can check out the North Carolina General Statutes to see more name restrictions. To know if your chosen name is available, go to the North Carolina Secretary of State business name database.
In the state of North Carolina, all nonprofit corporations should have at least one acting director.
The appointed director should be atleast 18 years old with an exception to organizations that mainly conduct youth activities. In these youth-oriented organizations, the director can be as young as 16 years old but not lower.
Even if you’re incorporated as a nonprofit, you still need to appoint and maintain a North Carolina Registered Agent.
This professional will take care of important nonprofit documents and mails for you so you need to hire someone who’s competent. Below are some of the basic requirements set by the state when hiring a professional registered agent:
If you need a North Carolina Registered Agent that you can trust, you can try the registered agent service of Rocket Lawyer.
To create your nonprofit, you need to file a certificate of incorporation before the North Carolina Secretary of State. Some of the basic information that you need to include during filing are the following:
You can obtain the North Carolina nonprofit articles of incorporation form at the Secretary of State’s website. Instructions can be found in the form and further assistance is provided by the Secretary of state through the guide: Incorporating Your Nonprofit in North Carolina.
The form provided to you by the North Carolina Secretary of State has very minimal information and it does not the language needed to obtain a 501(c)(3) tax exempt status from the Internal Revenue Service. To be able to obtain this, you need to include the specific information required by the IRS. Below are some of these languages:
Read the IRS requirements further through the IRS Publication 557 accessible to you through the IRS website. Don’t forget to include the state and federal tax-exempt language in your articles.
As a nonprofit, you’re still required by the state to follow corporate formalities such as scheduling a first meeting with your board of directors. In this meeting, you need to discuss the following:
Record the minutes of your board meeting and make sure that you keep it safe for future references.
A Corporate Records Book or your Corporate Records Binder must be set-up so you will be able to keep important documents safely.
Before starting any kind of business activity, make sure that you have this ready to record every meeting or transaction. You can purchase a corporate records book at your local office supply shop or directly order it from Amazon.
An Employer Identification Number (EIN) is a 9-series ID that can be obtained for free at the IRS website.
The IRS requires this because it will enable them to keep track of your business activities and state taxes. Also, an EIN is used in almost every business transaction so you need to have this before doing business.
Keeping your Non-Profit’s finances and personal finances separate is very important. The best way to do this is to open a separate business checking account.
Although there are many options available, do the research to see which is right for you and your business. If you’re not sure where to get started, here is a great roundup of the best banking options.
Filing your application for federal and state tax exemptions is the next step to complete the processing of your North Carolina nonprofit. Below is a sequence of the steps involved.
For you to obtain the federal tax-exempt status from the Internal Revenue Service, fill-out and file your Form 1023.
The form is quite detailed so you have to make sure that you have all the information needed. Some of the information which is going to be asked from you are the history of the organization, finances, structure and more.
Smaller nonprofits can file a form 1023-EZ or the Application for Recognition of Exemption of section 501(c)(3). Eligibility is based on two factors: annual gross income of less than $50,000 and assets 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 Department of Revenue’s website and its publication.
Additional reports and requirements may also be required based on your business activities and size of your nonprofit. If you intend to conduct fundraising activities, make sure that you register before the North Carolina Attorney General. You’ll be able to learn fundraising and registration requirements in the website.
The next step when starting a business in North Carolina is to adhere to all licenses and regulations. This will all depend on your specific industry and location so be sure to do your research.
To get started, see this resource roundup or look into this package where professionals do the research on your behalf. Do what you feel most comfortable with.
Now that you have followed the steps above, you are an official Non-Profit organization in the state of North Carolina. 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 business plan is a vital tool to increase your chances of success. Even if you’re not really in it for the money, you still have a mission that you want to achieve and the only way that you accomplish your objectives is if you know the direction where you’re going.
Build your nonprofit in the most efficient way possible by using these helpful resources below.
Forming your North Carolina nonprofit can be challenging but it doesn’t have to be difficult. Make sure that you do your own research and have this guide as your point of reference. Go through every step with accuracy so you will be able to successfully complete the entire process without repeating anything. I’m sure that your nonprofit will go a long way in helping others. Good luck my friend!
These days having a professional website is important, especially if you want to be taken seriously. With WordPress, you’ll be able to build a professional yet less complex website for your Non-Profit in minutes.
Recommended Resource: Learn more about WordPress and get started through this step-by-step guide that walks you through the entire process.
The primary purpose of this guide is to provide you with comprehensive instructions on starting a nonprofit in North Carolina. It should not be treated as a legal document or a replacement for legal advice. For the specific legalities of a nonprofit, you can consult with an attorney.