Step 1) Verify & Choose A Name For Your Nonprofit
First things first, you need a great name to represent your nonprofit. Your organization’s name should:
- Be distinguishable from any existing business or organization in Delaware. This essentially means that your nonprofit cannot have the same name as any other entity that’s registered in the state of Delaware.
- Include one of the following suffixes, depending on the nature of the nonprofit: "Company", "Foundation", "Corporation", "Club", "Fund", "Incorporated", "Institute", "Society", "Union", "Syndicate", "Limited" or “Association”.
Keep in mind that your nonprofit name is the first real branding decision you’ll make for the organization, so spend some time thinking over exactly what you want your brand name to communicate. You’ll want to find a name that represents your organization's central message and will attract other passionate individuals to your cause.
What To Do:
To find out whether or not your ideal name is available, you can run a quick name search here.
Once you find a name that meets the criteria outlined above, you can either reserve it (for a $75.00 fee) or wait until filing your Certificate of Incorporation to lock it down.
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!
Step 2) Appoint A Registered Agent & Initial Directors
Before you can file your Certificate of Incorporation, you’ll need to choose a registered agent.
Your Delaware registered agent may be an individual that’s resident of the state, or a business registered to operate in the state. They’ll be in charge of receiving important legal documents on your behalf, including tax forms and service of process notices. You are allowed to act as your own registered agent in Delaware, but there are a few reasons why you should think twice before committing. For example:
- If you’re unable to commit to maintaining normal (M-F, 9-5) business hours at your work or home address.
- If you work from home and are not comfortable making your personal address public.
- If you’re afraid of being served in front of family, friends or customers.
This is also a good time to start thinking about your initial board of directors. Although their names won’t be requested on your Certificate of Incorporation, it’s still a good thing to have nailed down as soon as possible (definitely before step 5).
When choosing directors, your priority should be finding people who share a passion for your mission and have some degree of business experience. Your board of directors may change over time, but it’s important to have reliable, dedicated individuals working on the organization in its beginning stages.
What To Do:
Have a quick read through our registered agent guide if you’re considering acting as your own. It’s important that you fully understand what’s legally required of you before signing up for this task.
Step 3) File Certificate of Incorporation
This is a huge step for your organization -- once you’ve filed your Certificate of Incorporation you’ll be officially recognized as a Delaware nonprofit corporation. Delaware’s Certificate of Incorporation template asks you to provide:
- Your nonprofit’s name
- Your registered agent’s physical address, mailing address and full name
- The purpose of your organization, and written confirmation that your corporation will serve as a nonprofit
- Any and all conditions of membership
…and a few other pieces of information. (Refer to the template itself for more details!)
What To Do:
Once everything has been properly filled out, mail the document and $89 filing fee to the following address:
Division of Corporations
John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901.
Step 4) Get An EIN
Now that you’ve filed your Certificate of Incorporation, it’s time to get an EIN for your organization. An Employer Identification number, or EIN, is used by the federal government to track your organization’s financial activity.
It’s a good idea to get your EIN before making any major financial moves. It’s also a requirement for setting up a business bank account and filling out IRS forms, so plan ahead and check this off your to-do list ASAP.
What To Do:
The good news is this is a pretty simple process. All you need to do is head over to the IRS website and fill out their online application. It’s totally free and you’ll get your identification number as soon as you finish. We think this is the best option because it’s the most efficient, but if this approach doesn’t suit you, we outline others in our EIN guide.
Step 5) Meet With Directors & Discuss Bylaws
Now it’s time to schedule your first meeting with your awesome board of directors. This organizational meeting represents a critical point for your organization, where you and your directors have the opportunity to breathe life into your nonprofit. You should plan on discussing pretty much every aspect of how your organization will run, including:
- Each director’s title and duties
- The length of directors’ terms
- How often the board will meet
- Conditions for adding/amending bylaws
- What decisions can be made with/without a meeting
During this meeting, you’ll also create your nonprofit bylaws, which will serve as the governing document for your organization. You’ll also record your very first meeting minutes at this time.
What To Do:
You’re about to make a number of significant decisions for your organization, so don’t go into this meeting unprepared. Do some research on what should be included in your nonprofit bylaws, as well as how to record meeting minutes. Using meeting minute and bylaw templates is a great place to start your research, as they’ll give you an idea of the key topics to address.
Step 6) Start A Corporate Records Book
At this point you’ve acquired a number of important documents, and it’s essential to have a safe place to keep them. While having a corporate records book isn’t a legal requirement, it’s a wise decision to have a safe, organized place to house documents like your:
- Certificate of Incorporation
- Tax forms
- Nonprofit bylaws
- Meeting minutes
At the bare minimum, you should get a simple binder designated for your nonprofit’s records. On the other hand, you may also choose to invest in a nonprofit corporate kit. Most corporate kits include things like a custom seal, membership certificates, printed bylaws, and some other unique pieces to demonstrate the legitimacy of your organization.
What To Do:
It’s totally possible to find a sufficient corporate records binder at a local office supply store. But, if you’re leaning toward getting a professional corporate kit, you might want to take a look at Blumberg or Bindertek. They cater specifically to nonprofit corporations, which is great since nonprofits have different needs than for-profit corporations.