Last Updated 05 September 2017 | By:

How To Form a 501(c)(3) Nonprofit In Arkansas

How to Use this Guide

Use the guide below to form a 501(c)(3) nonprofit in Arkansas. Keep in mind that the process requires forming a nonprofit corporation and getting tax-exempt status with the IRS.

Since the overall process is extremely complex, we highly recommend consulting with an attorney or using a service like Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.

Step 1) Verify Your Nonprofit Name

Choose a Business Name

Choosing a name is the first act of branding you’ll do for your nonprofit. In order to benefit your brand, your name needs to be memorable and capture the organization’s mission. However, it also needs to meet some legal requirements in order to be approved in Arkansas. Your nonprofit name must not:

  • Mislead about the organization’s purpose
  • Contain any profanities/restricted wording
  • Be confusingly similar to any entity name currently registered in Arkansas

Having a name that sets you apart from any other entity in Arkansas is as important for branding as it is for legal compliance. Think about it — if your name is too similar to that of an existing business, how is anyone supposed to remember you?

 

What To Do:

Once you’ve decided on an ideal name, do a business name search through the Secretary of State to see if it’s available. If it is, you can either reserve it or wait to lock it down until you file your Articles of Incorporation with the state.

It’s also a good idea to search GoDaddy for a domain name at this time. If there’s a decent one available for purchase, we recommend buying it — even if you’re not going to start a website for your nonprofit right away.

Step 2) Appoint Registered Agent

Choose a Registered AgentNext, you need to appoint a registered agent in Arkansas for your nonprofit. A registered agent is a person or company that’s responsible for accepting important legal documents on behalf of your organization.

If you appoint a person, they must be a resident of Arkansas with a street address in the state; if you appoint a company, they must be legally authorized to represent businesses in Arkansas.

Arkansas allows nonprofit members to act as the organization’s registered agent, but there are a few reasons why you, or another member, may not want to. For instance:

  • If you can’t commit to maintaining normal business hours at your home or work address
  • If you don’t want to publically link your personal address to the organization
  • If you’re worried about missing important notices or deadlines

If all of the issues above don’t concern you, you can feel free to list yourself as your organization’s registered agent. But before you jump the gun, we recommend at least taking a look at some professional registered agent service providers’ rates.

 

What To Do:

Read our guide to learn more about what registered agent duties entail. If you come to the conclusion that a professional service is your best bet, we advise getting a registered agent in Arkansas through an online incorporation company like Harbor Compliance. They include a full year of registered agent services in their nonprofit formation package.

Step 3) File Articles Of Incorporation

Business LicensesNow it’s time to register your nonprofit with the state! After this step you’ll be an official Arkansas nonprofit organization — although not quite a 501(c)(3).

Registering your organization requires filing Articles of Incorporation with the Arkansas Secretary of State. This document will ask for:

  • Your nonprofit’s name and purpose
  • Whether you’re a public, mutual or religious corporation
  • Whether or not the organization will have members
  • A description of how assets would be distributed upon dissolution
  • Your registered agent’s name and street address
  • The names, addresses and signatures of your incorporators

A designated officer will also have to fill out a contact information page attached at the end of the document. The information you provide there is where the organization’s annual reporting form will be sent!

 

What To Do:

Arkansas’ Secretary of State allows you to file your Articles of Incorporation online or on paper. If you choose to file online, it’ll cost $45.00 and everything will be taken care of through their digital application. If you file on paper, you’ll send your completed application and a $50.00 check made payable to the Arkansas Secretary of State to the following address:

State Capitol, Suite 256

500 Woodlane Street

Little Rock, AR 72201 

Or physically bring it to:

Victory Building, Suite 250

1401 West Capitol Avenue

Little Rock, AR 72201 

Quick Note: If you choose to take advantage of an online filing service — which we recommend — you’ll have all of this taken for you. Harbor Compliance offers the most comprehensive packages for nonprofits seeking 501(c)(3) status, so they’re our top recommendation.

Step 4) Get An EIN

Get an EIN for Your LLCNow that you’ve legally formed your organization with the state, you’re eligible to apply for an EIN. An EIN, or Employer Identification Number, is like a professional social security number — it’s the federal government’s vehicle for tracking your organization’s financial activity.

The majority of businesses are required to get an EIN, but they’re especially important for nonprofit organizations seeking federal tax exemption. The government is going to keep a close eye on you before — and after — 501(c)(3) status is approved.

 

What To Do:

We think the best way to obtain an EIN is by using the IRS online application. This method is totally free, and you’ll get your identification number as soon as you finish filling it out. However, there are a few other ways you can obtain an EIN for free if the online method doesn’t suit you. Check out our EIN guide for details.

Keep in mind that if you end up buying a comprehensive nonprofit formation package, this service will probably be included automatically.

Step 5) Meet With Directors & Establish Bylaws

Choose the Initial DirectorsYour organizational meeting is a vitally important moment in the life of your nonprofit. This is when you’ll sit down with your board of directors and flesh out:

  • Each member’s role and responsibilities
  • What actions may or may not be taken without a meeting
  • Your fiscal year
  • Your first meeting minutes
  • Your nonprofit bylaws

Basically, it’s when you’ll build an all-around solid foundation for your organization. Establishing your bylaws should take up a decent amount of time during this meeting. This document will govern the way your nonprofit runs for as long as it’s in existence, so put in the necessary time and energy to make sure it’ll guide the organization in the right direction.

 

What To Do:

To make sure you go into this meeting totally prepared, you might consider taking advantage of some online templates. Rocket Lawyer offers meeting minute and bylaw templates specifically for nonprofits, which is great since nonprofits have different needs than for-profit corporations. If you have any other specific concerns or points of confusion, you can always consult Arkansas’ nonprofit corporation statutes, too!

Step 6) Start A Corporate Records Book

File Annual Reports & Publication RequirementsNow that you’ve gathered quite a few important documents, it’s time to establish the place they’ll be kept. A corporate records book is where you’ll keep all of your legal paperwork and other records, like your:

  • Articles of Incorporation
  • Nonprofit bylaws
  • EIN
  • Tax forms
  • Meeting minutes

While it’s not a legal requirement to have a super-fancy corporate records book, it is important to keep all your corporate records organized, as you’ll be coming back to them time and time again.

You may feel that your organization only needs a simple binder, or on the other hand, maybe you’d benefit from a customized corporate kit. Corporate kits include extra pieces like a custom seal, printed bylaws, and meeting minutes, in addition to an engraved leather binder.

 

What To Do:

Decide whether or not you think your organization could really benefit from a corporate kit. Again, they’re not legally required — their purpose is more to help you communicate the legitimacy of your organization, both internally and externally.

If you decide a corporate kit is right for you, check out Blumberg and Bindertek. Both of these companies design corporate kits specifically for nonprofits.

Step 7) Apply For Tax Exemption

Small Business TaxesHere comes the big step: applying for tax exemption with the IRS. This is a huge step because it’s what will determine whether or not you become a 501(c)(3) organization.

Needless to say, it’s a fairly lengthy process — the IRS doesn’t just hand out tax-exempt status to anyone who seeks it. You have to meet a hefty load of requirements and fill out all the necessary paperwork with unwavering attention to detail.

You’ll either fill out Form 1023 or Form 1023-EZ, depending on your financial projections and some other details about the organization. Form 1023-EZ is the streamlined version of the application — it’s shorter and has a quicker turnaround time, so it’s definitely worth checking to see if you meet the criteria for this version. Read through the Form 1023-EZ Instructions Eligibility Worksheet (page 11). If you answer “no” to all of the questions, you can apply using Form 1023-EZ.

After you’ve finished the application, you’ll eventually need to file a Charitable Organization Registration Form with the state of Arkansas. You don’t need to complete this right away — just something to keep on your radar.

 

What To Do:

Again, this is a huge step for your nonprofit, and it shouldn’t be taken lightly. We firmly believe that all organizations seeking federal tax exemption should recruit expert help, either from an attorney or online filing company.

Harbor Compliance is one of the only online filing providers that offers comprehensive 501(c)(3) formation services. Not only will they file your Articles of Incorporation with the state and provide you with a registered agent, they’ll also take the reigns on the IRS application process and guarantee your tax-exempt status. This is the main reason why they’re our top pick.

Step 8) Start A Bank Account & Manage Finances

Best Business Bank AccountFinally, it’s time to set up a bank account for your nonprofit and begin properly managing your finances. Running a 501(c)(3) nonprofit requires immaculate financial management, and this is the first step.

Don’t just choose the first bank that pops into your mind. Do some solid research and pick a bank based on their:

  • Customer service
  • Online banking platform
  • Fee structures/minimum balances
  • National ATM access
  • Nonprofit-specific incentives

Every organization has different needs, and some of these features may be much more important to you than others. Think about which features will make the greatest positive impact on your organization, and choose accordingly!

 

What To Do:

Local and national banks both have their perks. We recommend visiting the websites of a few local options like Arvest Bank and Farmers & Merchants, and perhaps making some calls to compare their customer service.

National banks tend to be more technologically advanced, which is a top priority for many organizations today. Bank of America is our favorite national bank that currently operates in Arkansas.

Once you’ve settled on a bank, set up an account (you’ll need to bring your EIN and likely some other paperwork — ask the bank ahead of time) and get it synced with some accounting software as soon as possible. This is especially important if you’re not working with a professional accountant just yet. It’ll keep things simple and streamlined.

Need Help Forming Your Organization?

How To Form a 501(c)(3) NonprofitA 501(c)(3) nonprofit is the most difficult entity type you can form. For this reason, we’re major proponents of seeking professional help along the way from a professional.

If you want to be 100% sure every document is filed accurately and on-time, we recommend Harbor Compliance’s comprehensive 501(c)(3) package. Their services are well-worth the investment. Visit their website or read our review to learn more!