How to Form a Nonprofit Corporation in California

How to Use this Guide

To form a nonprofit corporation follow the steps below or have a professional service handle the paperwork for you:

– IncFile ($49 + state fee) for basic & quick nonprofit formation.

– LegalZoom ($99 + state fee) for the most well-known service available.

Step 1) Secure Your NonProfit Name

Choose a Business NameWhen deciding on a name for your California nonprofit, keep in mind:

  • The name may not contain “bank,” “trust,” “trustee,” or related words without approval by the Commissioner of Financial Inst.
  • The name may not contain “cooperative” or any abbreviation of it.
  • The Secretary of State will not accept a name that “is likely to mislead the public” or that is the same as, or “resembles so closely as to tend to deceive” either (i) a name that is already reserved with the Secretary of State or (ii) the name of a domestic corporation or foreign corporation qualified or registered in California, unless the existing corporation or the holder of the name reservation consents.

All of these points are discussed in greater detail in this PDF by the Public Counsel Law Center. Once you’ve settled on a name, make sure to conduct a business entity search through the state to ensure your desired name isn’t already registered by another entity in California!

Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use WEEBLY to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!

Step 2) Appoint A Registered Agent

Choose a Registered AgentEvery business and organization in California is required to appoint a registered agent (or statutory agent).

Your registered agent is the party responsible for receiving official notices and other important paperwork (legal notices, tax forms, state-level contracts, etc.) on behalf of your nonprofit. They may either be a California resident or a business entity with a physical “registered office” in the state, and they must maintain normal (9-5, M-F) business hours.

California doesn’t prevent you from acting as your organization’s registered agent, but it’s quite a commitment — read our guide to get a better idea of what it’ll entail. Hiring a professional service is the best route, but it can be a bit expensive (around $160/year).

The cheapest way to get registered agent services is typically through an online filing provider. Some companies, like IncFile, offer a year free (see details) when you form your organization with them.

Step 3) Select Incorporators & Directors

Choose the Initial DirectorsDepending on whether you’re forming a Public Benefit, Mutual Benefit or Religious Nonprofit, you may need to select incorporators and initial directors. Your incorporators will be responsible for executing the Articles of Incorporation, and your initial directors will oversee the nonprofit while it’s in the formation stage (until Step 7, when official directors will be voted in).

Article 5. 5-1 provides some direction here, as does this PDF on the fundamentals of nonprofit governance. Ideally, however, you’ll be able to work with a nonprofit attorney or incorporation provider on this step to ensure you totally understand all the formalities involved.

Step 4) Draft NonProfit Bylaws

Register an LLCYour bylaws are the rules and stipulations that will govern your organization, and they’re essential to running a legally compliant nonprofit in California. You can find tons of info on recommended bylaws online, but here are some topics you’ll probably want to cover:

  • How frequently you’ll hold meetings
  • The process of adding or amending bylaws
  • How you will elect/appoint new officers and directors
  • Where/how you will keep and manage your corporate records (see Step 6)

It’s a good idea to take advantage of a corporate bylaws template to help you put an initial document together. Your bylaws will be voted on and adopted later on (in Step 7). If any changes or amendments are made that contradict what you disclose on your Articles of Incorporation, you’ll need to notify the proper authorities so they can be reflected on the public record.

Step 5) File Articles Of Incorporation

Business LicensesFiling Articles of Incorporation with the state of California establishes your nonprofit entity in the eyes of the law. Most of the information you’ll provide here is fairly basic, but you’ll also have to include some specific statements about your nonprofit. For instance, you’ll be asked for:

  • Your nonprofit’s name, type, duration of existence, and statement of purpose (provisions for nonprofit vs corp)
  • The complete names & addresses of your California registered agent, incorporators and directors
  • Any specific provisions/bylaws set forth as part of the internal operations of your organization

You’ll also be required to submit a filing fee of $30.00 made payable to the Secretary of State. Once you’ve completed your Articles of Incorporation with close attention to detail, mail it in to the following address:

Secretary of State

Business Entities Filings Unit

P.O. Box 944260

Sacramento, CA 94244-2260

Step 6) Start A Corporate Records Binder

File Annual Reports & Publication RequirementsWhile it’s true that data tracking has largely gone digital, it’s still a good idea to have a traditional hardcover book or binder where your most critical documents — state registration paperwork, important contracts, licenses, meeting minutes — are kept.

It’s not legally required by any means, but it’s a common practice for corporations (both nonprofit and for-profit).

You can get a simple corporate binder at a local office supply store or on Amazon, or you can go for a full-on nonprofit-specific corporate kit through a company like Blumberg or Bindertek. Corporate kits include special pieces like a customized seal, printed bylaws and an engraved case for your binder.

Step 7) Conduct Initial Meeting

Hold a Meeting with Your Board of DirectorsDepending on your nonprofit type, this meeting may be fairly complex or lengthy. Essentially, it’s when you’ll sit down with your initial directors and agree on how the organization will be run. The California Attorney General provides some insight on what should be taken care of during this meeting in their Guide for Charities:

“Agenda items for the first meeting typically involve organizational issues, such as adopting bylaws, electing officers, establishing a bank account, setting the accounting year and basic accounting procedures, planning a budget for the first year, and adopting procedures for safe keeping of minutes, bylaws, and other corporate records.”

Step 8) Get An EIN

Get an EIN for Your LLCAn EIN, or Employer Identification Number, is a 9-digit number the IRS assigns to organizations and business entities as a way of tracking their financial activity. In addition to ensuring compliance with nonprofit tax laws, your EIN is also essential for opening an official bank account, legally hiring paid employees and applying for certain licenses/permits.

Luckily, you can get your EIN quickly, easily and free of charge by applying directly through the IRS. Their online application is the most efficient method, but you can also apply via fax, phone or mail. Read our EIN guide to learn more!