How to Form a Nonprofit

Starting a 501(c)(3) nonprofit is easy, just follow these easy steps:

Step 1: Name Your Nonprofit

The name you select for your nonprofit will establish its brand. It is the first thing most people will learn about your organization. It is important to pick a name that both aligns with your mission and follows the rules for naming in your state.

Learn more about how to name your nonprofit

Step 2: Appoint a Registered Agent

Most states require nonprofit corporations to have a registered agent who is a resident of the state.

What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.

Learn more about registered agents

Step 3: Select Your Board Members and Officers

The directors of a nonprofit are responsible for overseeing the operations of the organization. The directors come together to form a board.

The officers of a nonprofit (such as the president or the secretary) are individuals with responsibilities, and the authority to execute based on their job descriptions.

Together, the officers and the board will come together to make up the organizational structure of your nonprofit.

Learn more about selecting your board of directors and officers

Step 4: File Articles of Incorporation

To form a nonprofit corporation, you will need to file the required documents with the state.

This is the process of incorporation. The paperwork you will file is most commonly called the “Articles of Incorporation”, "Certificate of Formation" or "Certificate of Organization" depending on your state.

Once your relevant paperwork is filed with the state and accepted, your will have formed a Nonprofit Corporation.

Step 5: Draft Bylaws and Conflict of Interest Policy

There are two documents that will be central to the running of your nonprofit:

Bylaws: These are the rules that determine how your organization will be governed and run.

Conflict of Interest Policy: These are the rules set to ensure that decisions being made for the nonprofit are based on what is best for the organization, and not being motivated by what is best for individuals.

Learn more about how to write bylaws for your nonprofit

Step 6: Conduct an Organizational Meeting

An organizational meeting is the first official meeting of your nonprofit! Some of the things that are discussed in a typical organizational meeting:

• Taking attendance to show you have a quorum (minimum number needed)
• Appointing temporary officers, chairmen, secretary, etc.
• Adoption of the bylaws
• Adoption of conflict of interest policy

Don’t forget to record “minutes” of the meeting and have it signed by all attending directors. Here are some corporate minutes templates to help you get the ball rolling.

Step 7: Get an EIN

An EIN or Employment Identification Number (also called a Federal Tax Identification Number or Federal Employment Identification Number), is used to uniquely identify a business entity. You can think of the EIN as a social security number for your nonprofit.

The EIN is required for your organization whether or not it will have any employees.

Step 8: Applying for Exemption from Federal Taxes (501c3 status)

A nonprofit may be eligible for 501c3 status only if its purpose is limited to one or more of the following:

Charitable, Religious, Scientific, Educational, Literary, Fostering national/international amateur sports competition, Preventing cruelty to animals/children, Testing for public safety

Before a nonprofit can apply for 501(c)(3) status it must:

1. Elect at least 3 directors not related to each other
2. Register as a nonprofit with the state
3. Adopt the bylaws and conflict of interest policy
4. Have an EIN number

Once these four conditions have been met your nonprofit can apply for 501c3 tax exempt status by filing Form-1023 online.

If your application is approved, the IRS will send you a determination letter stating that your organization is exempt from federal taxes under section 501c3.

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