Last Updated 06 September 2017 | By:

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

How to Use this Guide

Use the guide below to form a 501(c)(3) nonprofit in Delaware. 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) Secure Your Nonprofit Name

Choose a Business NameThe first step to forming a Delaware nonprofit is to secure a unique name that follows the state’s naming statues including:

  • Your name should contain: ‘Company’, ‘Corporation’, ‘Association’, ‘Foundation’, ‘Club’, ‘Incorporated’, ‘Institute’, ‘Society’, ‘Fund’, ‘Union’, ‘Limited’, ‘Syndicate’, or any of the following abbreviations, ‘Corp.’, ‘Co.’, ‘Ltd.’, or ‘Inc’.
  • Be sure to conduct a Business Entity Search, or as many as needed to ensure no naming conflicts upon filing in Step 5.

If needed, you can file a Name Reservation Application with the DE Division of Corps to reserve the name for 120 days as well.

Filing Fee: $75

Step 2) Appoint A Registered Agent

Choose a Registered Agent

Appoint a Delaware Registered Agent is the next step you should take as they’re legally required for a great many things, specifically they become your registered office where all important legal notices and other paperwork are sent. Your agent provides process of service in this respect, so they must be either a registered citizen of Delaware or a registered business entity able to conduct business in the state.

It’s also important they hold regular and reliable business days/hours so there aren’t any delays. That said, you can hire an outside professional and spend up to $160/yr, or get a registered agent free of charge for the first year when you Incorporate with Harbor Compliance (see details). It’s a service we highly recommend to new nonprofits that need help but can’t afford legal assistance.

Step 3) Select Incorporators & Directors

Choose the Initial DirectorsIn Delaware your nonprofit must have at least one Incorporator (doesn’t need to reside in DE and can be a person, partnership, association or corporation), and yes you can have more than one, who is responsible for executing your certificate (Step 5) with the state. You’ll also need to select a minimum of one initial Directors (human only) to officially oversee the forming of the nonprofit until you’ve properly elected directors in your first board meeting.

It’s up to you and your initial directors whether they should be named in the Articles/bylaws. It may be helpful to bookmark this Delaware PDF “Volunteerism 101” which addresses board of director recruitment on pg. 5. Again, if this part and the corporate formalities are confusing don’t hesitate to reach out to a nonprofit professional or incorporation service!

Step 4) Draft Nonprofit Bylaws

Register an LLC

These are the operations and procedures that will govern your nonprofit organization, some of which will be stated in your Certificate of Incorporation, for example how to handle assets upon dissolution. Some of the issues covered should include:

  • Holding meetings, electing officers and directors,
  • Keeping and managing your records,
  • Adding/Amending bylaws,
  • How to handle other corporate formalities required in Delaware.

To get started, check out a savvy Corporate Bylaws Template with an example that you can customize yourself. Also, the Delaware corporate code Title 8. Chapter 1. Subchapter 1. has all the specifics of formation that you may find very helpful.

Step 5) File Certificate Of Incorporation

Business LicensesOnce you and your team are ready, have your incorporators execute the Non-Stock Corporation Certificate of Incorporation, or the Exempt Corporation Certificate of Incorporation, which are both relatively short and concise document that comes with basic instructions and filing fee information.

Just be sure you do not attempt to file either of these official documents with the state until you and your board are ready not only in terms of registered agent, incorporators, directors, name, etc., but also ready to take the next steps afterwards.

Filing Fee: $89 + $9 for Additional Pages + optional $50-$1000 Expedition Fees

Step 6) Start A Corporate Records Book

File Annual Reports & Publication Requirements

This isn’t mandatory or required by law by any means, but records books in the incorporated world are pretty much par for the course. They’re usually very nice and formal looking binders or books, and they contain copies of critical paperwork like contracts, meeting minutes, annual reports/taxes, and so forth. Highly recommended.

To get one for your nonprofit you can grab a quality records book at any nearby office supply store, order them online through Amazon, or get a professional Corporate Kit which let you brand the book/slip case, provide blank certificates, and more for as little as $99.

Step 7) Conduct Initial Meeting

Hold a Meeting with Your Board of Directors

Let’s look directly at section LawforChange’s breakdown on Delaware Nonprofit Corporations:

“Once the nonprofit nonstock corporation has been established, the initial members of the governing body, if named in the certificate of incorporation, should hold an organizational meeting, either in person or by consent, to ratify the acts in connection with the initial formation of the corporation and adopt bylaws.”

So basically these are your nonprofits rules, which you’re required to set forth and document and adhere to in order to maintain your exempt status and build a successful platform.

Step 8) Get An EIN

Get an EIN for Your LLC

Whether you intend on hiring paid employees or not, you’ve got to process taxes each year. And in order to do that you need an EIN, or Employer Identification Number (also called TIN) which is currently assigned by the Internal Revenue Service. It also makes it possible to get certain licenses/permits and open up an official bank account in Step 10.

That said, you can get one quickly, easily and free of charge by applying online through the IRS Website.

Step 9) Handle Licensing & Exemptions

Small Business Taxes

Now it’s time to ensure compliance on local, state, and federal levels and apply for exemptions in the process. Do keep in mind your nonprofit will be subject to conventional gambling laws.

Also, because of the many financial services and mutually beneficial relationships you can build, also feel free to bookmark the Wilmington Small Business Admin office & the Division of Corp’s Business Services website.

Step 10) Setup A Business Bank Account

Best Business Bank Account

If you haven’t already elected/appointed a CFO or treasurer who’s qualified to handle this and aren’t sure where to start building your nonprofit’s financial foundation, please take a couple minutes to read through the Top 10 Checking Accounts for Nonprofits. There’s really two parts to the big picture moral of the story here:

  1. Choose a banking institution based nonprofit-focused incentives and financial services;
  2. Keep your nonprofits bank account completely separate (an EIN helps with this) from all other accounts.

Start small, and do your research between local, state, and national banks as well as credit unions. This isn’t a light choice to make, but will have a tremendous impact on the first few years building your initiative.

Need Help?

How To Form a 501(c)(3) NonprofitIf you’d like help forming a 501(c)(3) Nonprofit In Delaware, we highly recommend looking into Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.

They handle everything on your behalf and be on-call for questions you have. If you’d like more info, visit their website or read our review.