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

How to Use this Guide

Use the guide below to form a 501(c)(3) nonprofit in Connecticut. 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 & Choose A Name For Your Nonprofit

Choose a Business NameThe first step toward forming a Connecticut-based nonprofit is choosing the perfect name. Your organization’s name should:

  • Be distinguishable from any existing business or organization in Connecticut. This essentially means that your nonprofit’s name must be unlike any other entity name in the state.
  • Contain the word “corporation”, “incorporated” or “company”, or the abbreviation “corp.”, “inc.” or “co.”

Keep in mind that your nonprofit name is the first real branding decision you’ll make, so take the time to make a wise decision. Choose a name that captures the essence of your organization and reflects your goals.

 

What To Do:

To find out whether or not your ideal name is available, do a name search through the Connecticut Secretary of State website.

While you’re at it, you might also search GoDaddy for a good domain name at this time, even if you’re not planning on launching a website right away. Along with your name, your website is also a significant part of branding your nonprofit.

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 GoDaddy 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!

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Step 2) Appoint A Registered Agent & Initial Directors

Choose a Registered AgentBefore you can file your Certificate of Incorporation, you’ll need to select a Connecticut registered agent. A registered agent may be an individual or a corporation, as long as they’re a Connecticut resident or a business registered to operate in the state.

They’ll be in charge of receiving all important legal documents on behalf of your organization.

You are allowed to act as your own registered agent in Connecticut, but there are a few reasons why you might choose not to. For instance:

  • If you don’t maintain normal (Monday through Friday, 9-5) business hours at your professional or personal address. This is mandatory for registered agents.
  • If you run your nonprofit from home and you’re not comfortable making your personal address public.
  • If you’re concerned about the possibility of being served in front of your family, friends or coworkers.

This is also a good time to appoint your initial directors — although Connecticut’s Certificate of Incorporation does not ask for their names. As a Connecticut nonprofit, you’re required to have at least 3 directors on your board at all times.

When choosing directors, make it a priority to find people who share your passion and vision for the nonprofit. You can always mix up your directors down the road, but it’s still important to start off with a solid group that will help you through the initial stages of setting up your organization.

 

What To Do:

Take a look at our registered agent guide if you’re on the fence about acting as your own registered agent. It’s really crucial that you fully understand what’s going to be legally required of you before signing yourself up for this commitment.

If it doesn’t sound like the right fit, consider taking advantage of Harbor Compliance’s registered agent services — they’re included as part of their 501(c)(3) incorporation package.

Step 3) File Certificate of Incorporation

Business LicensesCongrats — once you’ve filed your Certificate of Incorporation, you’ll officially be recognized as a Connecticut nonprofit corporation (although not a 501(c)(3) yet). The Certificate of Incorporation will ask for:

  • Your nonprofit’s name and purpose
  • The membership structure of your organization
  • Your registered agent’s name and address
  • The names, addresses and signatures of your incorporators

…and a few other pieces of relevant information.

You can choose to file online or on paper — either way you’ll need to fulfill the $50.00 fee. If you choose to file on paper, you’ll send your Certificate of Incorporation to the following address:

Commercial Recording Division

P.O. Box 150470

Hartford, CT 06115-0470 

If you file online, of course, you won’t need to send anything to the Department of Commerce — it’ll all be taken care of electronically.

 

What To Do:

When you’re ready to file your Certificate of Incorporation, we highly recommend leveraging the help of a professional filing service. Forming a 501(c)(3) nonprofit organization is the most complicated formation process out there, so you may need some help from a professional at some point.

Harbor Compliance is one of the only providers that takes care of the federal tax-exemption process on top of the Certificate of Incorporation and registered agent services, so we recommend them above any other provider for this particular type of formation.

Step 4) Get An EIN

Get an EIN for Your LLCAn Employer Identification Number, or EIN, is the federal government’s way of tracking your organization’s financial activity. All corporations are required to have EINs, but they’re especially important for nonprofits seeking 501(c)(3) status since you’ll be under even more scrutiny.

In order to acquire and maintain tax-exempt status, your finances are going to be examined very closely — so it’s a good idea to get an EIN before making any big financial moves. It’ll also be necessary when you’re setting up a bank account and filling out IRS forms, so it’s just better to plan ahead and apply as soon as possible.

 

What To Do:

Good news, EINs are actually easy to acquire. All you need to do is head over to the IRS website and fill out their online application. It’s 100% free and you’ll get your identification number as soon as you submit your application. We think this is the best approach because it’s the most efficient, but you can also apply for free using other methods, which we’ve outlined in our EIN guide.

Tip: All that said, keep in mind that if you end up working with a provider like Harbor Compliance, they’ll take care of your EIN for you!

Step 5) Meet With Directors & Discuss Bylaws

Choose the Initial DirectorsNow that you’ve filed most of the key pieces of paperwork, it’s time to start helping your organization take shape.

The organizational meeting is a crucial moment for your nonprofit when you’ll discuss some ground rules and decide how your organization will be run. When you go into this meeting, you should be prepared to establish:

  • Your nonprofit bylaws
  • Each director’s title and duties
  • The length of directors’ terms
  • When the board will meet
  • Conditions for adding/amending bylaws
  • What decisions may be made with/without a meeting

Establishing your nonprofit bylaws is a hugely important part of this meeting. While you’re discussing your bylaws, remember that they will serve as the governing document of the organization for years to come. Having a well-constructed set of bylaws is a surefire way to prevent and resolve disputes in the face of chaos!

 

What To Do:

This is a big moment for your nonprofit, so it’s best to go in fully-prepared. You can prep yourself by doing some more research on what should be included in your nonprofit bylaws, how to record meeting minutes, and the requirements that the state of Connecticut has in place for nonprofits. It’s also a good idea to take advantage of nonprofit-specific meeting minute and bylaw templates for some guidance here!

Step 6) Start A Corporate Records Book

File Annual Reports & Publication RequirementsBy now you’ll have acquired quite a bit of paperwork, so naturally you’ll need a place to put it. Having all of your essential documents in one central location isn’t just beneficial for the organization of your nonprofit, it also demonstrates your professionalism. In your corporate records book, you’ll find a home for your:

  • Certificate of Incorporation
  • EIN
  • Tax forms
  • Bylaws
  • Meeting minutes

…and much more.

While it’s 100% required that your organization maintains all these records, how you present them is up to you. If you just want to keep it simple, get a binder at your local office supply store and make it designated for your nonprofit’s records.

On the other hand, if you’re looking for a more professional presentation, you can invest in a full-fledged corporate kit. Most corporate kits include a custom seal, membership certificates, and some other unique pieces that can help you assert the legitimacy of your organization. It’s up to you to decide what your nonprofit could benefit from!

 

What To Do:

If you’re leaning toward getting a customized binder or corporate kit, you might take a look at Blumberg or Bindertek. They design products specifically for nonprofit corporations, which is great since nonprofits have different needs than for-profit corporations.

Step 7) Apply For Tax Exemption

Small Business TaxesHere comes the most complex aspect of starting your 501(c)(3) nonprofit: applying for federal tax exemption.

Along with being the most complex, it’s also the most lengthy document and the longest waiting period you’ll encounter during the formation process — so as you can imagine, it’s important to get it right the first go-round.

Depending on the size and scale of your nonprofit, you’ll either have to fill out Form 1023 or Form 1023-EZ. The EZ version is significantly shorter and has a quicker turnaround time, so it’s worth investigating to see if your organization qualifies.

To find out, open up the Form 1023-EZ Instructions and scroll down to Eligibility Worksheet (page 11). If you answer “yes” to any of the questions, you’re not eligible for the streamlined version.

 

What To Do:

Again, obtaining 501(c)(3) status is a pretty intensive process, so it’s wise to seek out professional help here. Harbor Compliance is our favorite provider for nonprofit assistance, but you may choose to collaborate with an attorney instead.

Both are excellent approaches, but both involve spending some money upfront to get everything handled properly. Don’t worry though — the investment is definitely worth it to know your tax-exemption filing is taken care of.

Step 8) Set Up A Bank Account & Manage Finances

Best Business Bank AccountNow that all of that has been handled, you’re ready to open up a bank account for your nonprofit!

Properly managing your finances is even more important for 501(c)(3) organizations than other entities because you’ll be highly monitored by the federal government. They will continually examine your finances and determine whether or not you meet the qualifications for tax-exemption over time. So, there’s no wiggle room for mixing personal and professional expenses here!

While you’re searching for the right bank, think about which of the following qualities are most important to your nonprofit:

  • Customer service
  • National ATM accessibility
  • Fee structures
  • Online features
  • Minimum account balances
  • Nonprofit-specific incentives

There are tons of banks out there, both on the local and national plane, and each has something different to offer.

 

What To Do:

Start by researching local banks with locations near you: perhaps Webster Bank or First Connecticut Credit Union. Oftentimes these local options have tons to offer in the way of customer support and perks.

That said, national banks can be great for other reasons. Of our favorite national banks, the two with the most accessibility in Connecticut are Wells Fargo and Bank of America (find our reviews here).

Finally, once you get settled with a bank, you’ll want to sync your account with an accounting software in order to start managing your finances properly. Have a look at our top 7 accounting software tools for our thoughts on the best programs available!

Need Help Forming Your Organization?

How To Form a 501(c)(3) NonprofitForming a 501(c)(3) nonprofit in Connecticut is a huge undertaking, and somewhere along the way you’ll need to seek out help. Because of this, we highly recommend starting off on the right foot by bringing in a professional service right off the bat.

Providers like Harbor Compliance serve as a helping hand during nearly every step we covered in this guide, allowing you to focus on the day-to-day challenges of starting your nonprofit. Visit their website or read our review to learn more about what they can offer your organization!