STEP 1) SECURE YOUR NON-PROFIT NAME

Choose a Business Name

First and foremost, you need to name your non-profit with something unique and unlike any other business entity registered with the state. There are a number of other naming rules, so be sure to bookmark the 805 ILCS 105/104.05 which are the specific sections within the IL Non-Profit Act covering corporate naming regulations.

Also, be sure to conduct a Name Availability Search to check for naming conflicts. If needed, you have the option of filing an Application for Reservation of Name that protects the name for 90 days until you can file Articles of Incorporation in Step 5.

Filing Fee: $25

STEP 2) APPOINT A REGISTERED AGENT

Choose a Registered Agent

Forming a non-profit corporation requires a qualified Illinois Registered Agent to officially receive and help you process important documents, for example state-level paperwork or legal notices. Do keep in mind this agent must be an Illinois resident or authorized Illinois business entity with a physical street address that’s always available during regular M-F business hours.

In terms of pricing you can either hire on outside professional yourself and expect to pay up to $160/yr, or get a qualified registered agent for free when you incorporate your non-profit through IncFile or Incorporate.com.

STEP 3) SELECT INCORPORATORS & DIRECTORS

Choose the Initial Directors

An incorporator is simply the individual(s) who deliver your Articles of Incorporation to the state so they can be filed and make your non-profit official. Directors on the other hand are those who help you run your non-profit. You’ll need to select at least 3 initial directors to oversee it until formed and new ones are voted in.

These initial directors will be listed in your Articles as well. Your official directors and their number will be stated in your bylaws once voted in. To be frank, working with an attorney or incorporation provider really comes in handy during this foundational step because there are definitely corporate formalities to learn.

STEP 4) DRAFT NON-PROFIT BYLAWS

Register an LLC

Your bylaws define your non-profit – structure, management, and governance. See this Bylaws Fact Sheet from TheLawProject.org which is very helpful. Common non-profit bylaws include:

  • Detailed info on principle and registered agent offices.
  • Management, procedures, and responsibilities of the board.
  • Details on each office – Pres., Secretary, Treasurer, etc.
  • How to go about Adding/Amending bylaws,
  • How to handle other corporate formalities required in the state.

To get started, check out this savvy Corporate Bylaws Template with an example that you can customize yourself and get an idea for what they look and sound like. These will be voted on and adopted or amended in your initial meeting in Step 7.

STEP 5) FILE ARTICLES OF INCORPORATION

Business Licenses

Once you and your team decide it’s time to form the initial corporation before the law and in the public record, file your non-profit Articles of Incorporation or submit them via mail, fax, or online. Some data includes:

  • The name, type, duration of existence, and statement of purpose (provisions for non-profit vs corp);
  • Complete names & addresses of registered agent (and office), incorporators, and directors.
  • Any specific provisions/bylaws set forth as part of the internal operations of your organization.
  • A stipulation of apportioning assets to any 501(c)(3) upon termination of your organization.

Two other things, first, bookmark the IL Guide for Organizing Non-Profit Corporations PDF and check IRS Publication 557 on the IRS website to get comprehensive information regarding your filing.

Filing Fee: $50

STEP 6) START CORPORATE RECORDS BOOK

File Annual Reports & Publication RequirementsThink of this as the ultimate non-profit binder that contains hard copies of the most important documents, especially state-level filing papers, major contracts, and any legal notices. Are they required? No. But, they’re default within the corporate/non-profit world and come highly recommended for organizational/professional reasons.

You can find them at nearby office supply stores or on Amazon, but we’re huge fans of Corporate Kits which include gorgeous records books/binders, blank certificated, and you can brand them for as little as $99.

STEP 7) CONDUCT AN INITIAL MEETING

Hold a Meeting with Your Board of Directors

Now it’s time to conduct your first non-profit meeting which is going to be very organizational/foundational in nature. Don’t forget to record “minutes” of the meeting and have it signed by all attending directors. Here’s a Corporate Minutes Template to get the ball rolling. The agenda should look something like this:

  • Take attendance and show you have a quorum (minimum number needed).
  • Appoint temporary officers, chairmen, secretary, CEO, etc.
  • Adoption or amendment of the bylaws set down in Step 4.
  • Where to set up a bank account (Step 10), file state reports, etc.

Those are the basics, but depending on the nature of your non-profit and how many members/directors are at the meeting there could be a lot more to discuss. It’s a huge move in the right direction though, so celebrate afterwards!

STEP 8) GET AN EIN

Get an EIN for Your LLC

Whether you intend on hiring paid employees or not your non-profit needs to have an EIN or an FEIN, which means a 9-digit Employer Identification Number. In essence, it’s like a social security number but it tracks your financial activity to ensure compliance with state/federal tax laws.

There are a variety of ways to get one but the easiest is online directly through the IRS Website. It’ll come in handy when you go to set up your bank account.

STEP 9) HANDLE LICENSING & EXEMPTIONS

Small Business Taxes

It’s time for your non-profit to become 100% compliant in terms of not only licenses/permits, but state and federal taxes. You should be able to apply for tax exempt status now that the corporate entity is established.

A couple other great resources are of course the Chicago Small Business Admin office and the Sec. of State’s Business Services because there are near endless ways in which the non-profit and business community work together for the betterment of all.

STEP 10) SETUP A BUSINESS BANK ACCOUNT

Best Business Bank Account

We saved the best for last. After everything above, and with your EIN in hand, you can now choose which institution to form the financial foundation of your non-profit. Don’t be hasty here. If you haven’t appointed a CFO, be sure that you or someone else takes time to research different local, state, and national banks/credit unions.

If you aren’t familiar with this side of banking, there’s a lot more to it because it’s a corporate account. This means there are different fee structures, financial services, and permissions involved. How many people will be using this account? Be sure that it isn’t mixed with any other accounts, business or personal, so that you’ve got a clean and tidy record of transactions!

OPTIONAL) WORK ON A FUND-READY PLAN

Write a Business PlanBecause of the nature of a non-profit you don’t have to go about the planning process alone, you’ve got a board and committees. So it’s time to start putting your heads together and nailing down the specifics of your initiative that includes outreach methods, financials, marketing tactics, precise mission statement, culture, etc.

The process itself is very powerful, not just for the non-profit’s brand but for directors and managers and the whole team as well. It’s incredibly important and the more minds you can meld with on this, the more specific and refined you get the better. To dive in, use the free resource links below:

QUICK LINKS TO NON-PROFIT PLANNING

  • Our ultimate Business Plan Tool guide breaks down the best software solutions to help you plan better.

OPTIONAL) PUBLISH A RESPONSIVE WEBSITE

Build a Business Website

If you already have a site, then you already to some degree understand how critical they are in the non-profit world. They provide stunning value literally across the board. Will it be or become the cornerstone? No, maybe not. Your impact model might not put much emphasis on forming a digital presence, but one is necessary nonetheless.

What will potential donators, supporters, and volunteers find when they search online for your name? There needs to be something people can engage with and use to investigate your project. To get started, bookmark the 2016 Edition of the 20 Best Non-Profit Websites compiled by Top Non-Profits because there’s plenty to be inspired by.

Need Help Forming Your Organization?

Have a reliable incorporation service like IncFile or LegalZoom do the work for you. Just answer a few questions about your organization and they’ll take care of the paperwork.

Visit IncFile Or Visit LegalZoom

Note that this article on how to form a non-profit organization in Illinois isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form a non-profit organization in Illinois or business in general, please consult with a lawyer or other accredited professional.