Step 1) Secure Your Nonprofit Name
The most time-sensitive matter at hand is locking down a name for your nonprofit corporation. Choosing a unique, catchy name is super important for branding your organization, while choosing an appropriate and available name is necessary for staying out of legal trouble.
When selecting a name, make sure it:
- Doesn’t include any restricted or prohibited terms. Kentucky law either forbids or requires official approval for the following words in business names: cooperative, bank, engineer, and insurance.
- Is distinct from any business registered in the state.
- Ends with one of the following terms or abbreviations: corporation, company, limited, Corp., Inc., Co. or Ltd. Although you’re forming a Kentucky nonprofit, it’ll still technically be classified as a corporation.
What to DoConduct a name search through the KY Secretary of State website to find out if your ideal name is available. Business names are first come first serve, so if yours is up for grabs we advise you to start hustling to get your organization formed. Alternatively, if you’re going to have to wait a while to file your Articles of Incorporation, you can also reserve your name for up to 120 days.
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 Registered Agent & Directors
Now it’s time to appoint a Kentucky registered agent and initial board of directors, as you’ll need to include their information on your Articles of Incorporation.
Kentucky business law requires you to appoint a registered agent to receive tax forms, service of process notices, and other important documents on behalf of your nonprofit. Your registered agent in Kentucky needs to be a legal resident of the state, or a company legally allowed to do business in the state.
They also need to maintain normal business hours at a local address. Some folks choose to act as their own registered agent, but there are a few reasons you may not want to -- for instance, if you don’t keep normal business hours, or if you operate out of your home and don’t want to make your personal address public.
Around the same time, you’ll want to decide on your initial board of directors. Kentucky requires you to list 3 board members on your Articles of Incorporation, so you’ll need to choose at least 3 to start out. When selecting your directors, make sure to choose people who:
- Are reliable, competent and goal-oriented
- Have some level of business/nonprofit expertise
- Share a passion for your mission
- Are willing to invest their time and money to see through the organization’s goals
What to DoIf you’re considering acting as your own registered agent, take a look at our guide to get a better idea of the responsibilities involved. If you decide you’re up for the task, great! Otherwise, to enlist the help of a professional, consider getting registered agent services through an online filing provider. Some companies offer a year free when you form your organization with them.
Step 3) File Articles Of Incorporation
This is quite an exciting step, because once you’re through you’ll be a legally-recognized nonprofit corporation! Your Articles of Incorporation require the following information:
- Your nonprofit corporation’s name and purpose
- Your registered agent’s name, street address and signature
- Your main office’s mailing address
- Your initial directors’ names and mailing addresses
- Your incorporator’s name, mailing address and signature
- The county wherein your organization will operate
What to DoOnce you’ve got all the proper information, you’ll send the document to the Secretary of State at the following address:
Alison Lundergan Grimes
Office of the Secretary of State
P.O. Box 718
Frankfort, KY 40602-0718Make sure to include a check for $8.00, too -- that’s Kentucky’s filing fee for nonprofit corporations.
Step 4) Get An EIN
An EIN, or Employer Identification Number, is basically a social security number for your organization. The federal government requires all U.S. corporations to have EINs in order to track their activity for tax purposes.
Your EIN is going to pop up as a requirement all over the place, including on the application for a business bank account, so it’s a good idea to get it ASAP.
What to DoRead our EIN guide for more information on what an EIN is, why it’s necessary to have one, and how to go about obtaining one for your organization. Truth be told, it’s really not that complicated. The quickest, cheapest way to go about obtaining an EIN is by simply filling out the IRS online application yourself -- just be sure all the information you provide is accurate.
Step 5) Start A Corporate Records Book
A corporate records book isn’t a legal requirement, but it’s a good idea to have one for your Kentucky nonprofit. This is where you’ll keep your:
- Articles of Incorporation
- Permits and licenses
- Tax forms
- Nonprofit bylaws
- Meeting minutes
- Any other important documents you acquire
What to DoLots of businesses sell corporate binders, but not all of them offer ones specifically for nonprofit corporations. Blumberg and Bindertek are a couple that do, so their products are worth checking out. You might also consider upgrading to a full-fledged corporate kit, which includes a corporate seal and other customized pieces your nonprofit can use to demonstrate the legitimacy of the company.
Step 6) Meet With Directors & Discuss Bylaws
Your first meeting with your initial directors will be a formative time for your nonprofit. It’s when you’ll draft your bylaws, which will outline:
- The leadership structure of your organization
- Each board member’s role/title
- The length of directors’ terms
- Rules for adding/amending bylaws
- What actions can or cannot be taken without a meetingYou’ll also need to record the meeting minutes, since these will be submitted to the IRS, too. And of course, don’t forget to put all the paperwork from your meeting in your corporate records book for safekeeping!