Step 1) Secure Your Nonprofit Name
Securing your nonprofit's name is a critical first step and there's basically three things you need to know, for everything else please refer to the Iowa Nonprofit Act section 504.401 concerning corporate names.
- The name must be unique so be sure to conduct Business Entity Searches through the state.
- The name must be aligned with your purpose or mission statement.
- No formal corporate suffixes or their abbreviations are required in Iowa.
And finally, If needed, once you know your name is acceptable you can file an Application for Reservation of Name form for only $10 and keep it protected until it's filed for the public record.
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) Designate A Registered Agent
Forming a nonprofit corporation requires a qualified Iowa Registered Agent to receive and help you officially process important documents, for example state-level paperwork or legal notices.
Do keep in mind this agent must be an Iowa resident/citizen or authorized Iowa business entity with a physical street address that’s always available during regular M-F business hours.
In terms of pricing you can either hire on outside professional yourself and expect to pay up to $160/yr, or get a qualified registered agent for free when you incorporate your nonprofit through Incfile.
Step 3) Select Incorporators & Directors
First of all Iowa only requires a single incorporator and initial director. The incorporator (there can be more than one) is going to be named as such, and while they won't need to deliver any Articles to the state physically they will be a part of the founding of your nonprofit. Your initial director will help oversee things until official directors are voted on in Step 7.
Bookmark the Iowa Principles & Practices for Nonprofit Excellence PDF because it has some of the finer details and links to more resources, but to be frank, working with an attorney or incorporation provider really comes in handy during this foundational step because there are definitely corporate formalities to learn.
Step 4) Draft Nonprofit Bylaws
Your bylaws define your nonprofit – structure, management, and governance. Common nonprofit bylaws include:
- Detailed info on principle and registered agent offices.
- Management, procedures, and responsibilities of the board.
- Details on each office – Pres., Secretary, Treasurer, etc.
- How to go about Adding/Amending bylaws,
- How to handle other corporate/nonprofit formalities required in Iowa.
To get started, check out a savvy Corporate Bylaws Template with an example that you can customize yourself and get an idea for what they look and sound like. These will be voted on and adopted or amended in your initial meeting in Step 7.
Step 5) File Articles Of Incorporation
Iowa doesn't currently offer an Articles of Incorporation form or template you can fill out, print and submit by mail. Instead it's much more efficient to file through their Business Entity Filings process online. Also, be sure to read through Section 504.502 in the statutes to get all the very specific information on what's entailed and required.
Once you file you'll receive a Certificate of Acknowledgment from the state which should promptly be added to your records book which we're going to discuss briefly in the next step.
Filing Fee: $20
Step 6) Start A Corporate Records Book
This is a long-standing formality of being a for-profit or nonprofit corporation that goes along with digitally keeping track of your important paperwork/data. It’s an organized physical book, or binder, that contains hard copies of the most critical paperwork – state filing documents, licenses & permits, meeting minutes, tax returns, important contracts, etc.
You can find them at nearby office supply stores or on Amazon, but we’re huge fans of Corporate Kits which include gorgeous records books/binders, blank certificated, and you can brand them for as little as $99.
Step 7) Conduct Initial Meeting
Okay, this is your first official meeting and the kickoff of your newly formed nonprofit. That said, let’s take a look at three critical governance mistakes nonprofit boards make to give you some perspective here.
- Failing to understand their fiduciary (trustee) duties.
- Failing to provide effective oversight to the nonprofit.
- Directors deferring to many responsibilities to executive committee, board chair or the founders.
You can learn more in this Nonprofit Law Article and section 504.841 has info you should know as well. Keep in mind you’ll need to record everything that happens and have it signed. Here’s a Minutes Template you can customize and use to get the ball rolling.
Step 8) Get An EIN
An EIN, or FEIN, is a Federal Employer Identification Number and your nonprofit entity is required to have one whether it has paid employees in the beginning or not. In other words, it’s like a social security number for your organization except it’s there to track financial activity to help maintain exempt status. You also need one to open up an official bank account.
Almost every transaction your nonprofit engages in will require an EIN. That said, you can get one quickly and free of charge by applying online through the IRS Website.