How to Form a Nonprofit in Louisiana

Two people forming a nonprofit in Louisiana

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OVERVIEW

For-profit organizations are started with the goal of financial gains. Nonprofits corporations are started with the intent for social change.

Most nonprofit organizations apply for federal 501c3 status because getting the 501c3 status has many advantages such as tax exemptions, special rates on bulk mailings, and tax-deductible donations.

NOTE:A 501c3 nonprofit is an organization that has been designated as a ‘nonprofit’ by the state government and as a ‘501c3’ organization at the federal level.

This guide will show you how to form a 501(c)(3) Nonprofit Public Charity in Louisiana. Read our detailed guide, or if you want to get started right away, you can download the required paperwork.

To start a 501(c)(3) nonprofit corporation in Louisiana you must:

  1. Form a nonprofit corporation according to the rules of the state.
  2. Apply for 501(c)(3) tax-exempt status with the IRS.

You will need the following documents:

Formation & Regulations

Select and Seure Your Nonprofit's Name


Step 1) Select and Secure Your Nonprofit's Name

The name you select for your nonprofit will establish its brand. It is the first thing most people will learn about your organization. It is important to pick a name that both aligns with your mission and follows the rules of naming in Louisiana.

 

1. Naming Guidelines

  • The name of your organization must not include the following words: 
    • “bank”, “banking”, “banker”, “savings”, “trust”, “deposit”, "insurance", "mutual", "assurance", "indemnity", "casualty", "fiduciary", "homestead", "building and loan", "surety", "security", "guarantee", "cooperative", "state", "parish", "redevelopment corporation", "electric cooperative", or "credit union".
  • You can read the state's official guidelines for the complete rules on naming a Louisiana based organization.

 

2. Is the name available?

The name of your nonprofit must be distinct from that of any other corporation in Louisiana. Use the Business Entity Search to make sure the name you have selected has not already been taken.

 

3. Is the website available? 

If you plan to have a website for your organization, you will want to make sure that a suitable URL is currently available on GoDaddy.

You may want to buy any URLs you are interested in, to make sure they are available when you are ready to finalize and create your website.

Find a Domain Now

Service provided by GoDaddy.com

After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

Appoint a Registered Agent

Step 2) Appoint a Registered Agent

A nonprofit corporation in Louisiana is required to have a registered agent with a Louisiana address.

What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.

Who can be a Registered Agent? A registered agent must be a resident of Louisiana or a corporation, such as a registered agent service, authorized to transact business in Louisiana. You may elect an individual within the company including yourself.

Need Help?

Incfile provides the first year of registered agent service free with LLC formation ($49 + State Fees)

Decide how your organization will be managed

Step 3) Select Your Board Members and Officers

The directors of a nonprofit are responsible for overseeing the operations of the organization. come together to form a board.

Features of directors:

  1. All the directors of an organization together form the board of directors.
  2. The power and influence of the directors over the organization is as the board of directors, the directors do not have authority as individuals.
  3. The board typically creates the policies that govern the nonprofit. The board of directors also oversee management-level hiring like that of the officers.

The officers of a nonprofit (such as the president or the secretary) are individuals with responsibilities, and the authority to execute based on their job descriptions.

Together, the officers and the board will come together to make up the organizational structure of your nonprofit.

An officer may also be on the board of directors and serve both roles if allowed to do so by the organizational bylaws created by your team.

The organization structure of your nonprofit in Louisiana MUST include:

  1. At least 3 directors not related to each other
  2. A president
  3. A secretary

NOTE: One person may hold two or more officer positions, however, if a document requires signatures of two officers, it must be signed by two different people.

 

File Article of Formation

Step 4) File the Articles of Incorporation

To become a nonprofit corporation in Louisiana you must file the Articles of Incorporation with the Secretary of State.

Here are the sections that you will need to complete.

Section 1) Name
Enter the name you selected in Step 1.

Section 2) Purpose
Attach a document describing the purpose of your nonprofit organization to being explicitly be limited to one or more of the following:

  • Charitable
  • Religious
  • Educational
  • Scientific
  • Literary
  • Testing for public safety
  • Fostering national/international amateur sports competition
  • Preventing cruelty to animals/children

NOTE: You can read the IRS guidelines here.

Section 3) Duration
If your organization is planning to be in existence for a fixed amount of time put the end date here.

Most organizations are not started with an end date in mind. If this is the case for your nonprofit, write ‘perpetual’.

Section 5) Registered Office
Enter the address of the office of your organization.

Section 6) Registered Agent
Enter the full name and address of the registered agent you appointed in Step 2.

Section 7) Incorporator
An incorporator is any person filing the Articles of Incorporation for an organization. This may be you or a lawyer helping you with the process.

Section 8) Board of Directors
The organizer, commonly known as the incorporator, is the person who completes, signs and submits the certification of formation. This person does not need to be a part of your organization. This can be you or a lawyer helping you with the process of formation.

Section 9) Other Provisions
Use this space to include provisions ensuring that in the event your organization is dissolved, the assets of the organization will be used towards tax exempt purposes. 

Section 5 of this sample document provides an example of these provisions required for 501(c)(3) eligibility.

Section 10) Execution
When you sign and date the form as an incorporator you are affirming everything written in the form.

Your registered agent must sign acknowledging that they have consented to act as the registered agent for the organization.

You will also need the form to be signed by a Notary Public affirming that they have witnessed the signatures on the form.

File online, submit by mail, or submit in-person:

Secretary of State Address

MAILING ADDRESS:

Secretary of State
P.O. Box 94125
Baton Rouge, LA 70804-9125

 

OFFICE ADDRESS:

8585 Archives Ave
Baton Rouge, LA 70809

 

Commercial Division Phone Number: (225) 925-4704 
Fax for Corporation Services: (225) 932-5314
Website: www.sos.la.gov

The filing fee may be paid by

  • Personal or business checks (made payable to the "Secretary of State")
  • Money order
  • American Express, Discover, Mastercard or Visa credit cards (subject to a $5 convenience fee)
  • Cash (in-person only)

FAQ:

How much does it cost to file the Articles of Incorporation in Louisiana?
The standard fee is $75. Processing can be expedited to 24 hours for an additional $30. An expedite fee of $50 will ensure that your paperwork is processed within 2-4 hours.

 

Step 5) File with the Recorder of Mortgages

Take a moment to locate the recorder of mortgages in the parish where the organization’s office is located.

Within 30 days of filing the articles of incorporation you must file with the recorder of mortgage office the following documents:

  • A secretary of state certified copy of the Articles of Incorporation
  • A copy of the certificate of incorporation. 

You can read the exact rule here.

Operating Procedures & Housekeeping

1) Draft Bylaws and Conflict of Interest Policy

There are two documents that will be central to the running of your nonprofit:

Bylaws: These are the rules that determine how your organization will be governed and run.

You can think about it as a constitution for your nonprofit. It makes the rules and priorities clear for everyone involved.

In your bylaws be sure to include:

  • How the nonprofit will be governed – the role of directors and officers
  • How meetings are held, voting procedures, electing officers or directors.
  • How records will be kept and managed
  • How disputes will be handled
  • How bylaws will be added amended in the future

NOTE: Keep in mind that the bylaws will supplement any rules set forth by the federal government or the state.

Ready to get started? Check out these bylaws templates which you can customize to suit the needs of your organization.

The Conflict of Interest Policy: These are the rules set to ensure that decisions being made for the nonprofit are based on what is best for the organization, and not being motivated by what is best for individuals.

Under Appendix A the IRS provides a sample Conflict of Interest Policy.

NOTE: You will want to have both these documents drafted before for your first organizational meeting

 

Conduct an Organizational Meeting

2) Conduct an Organizational Meeting

An organizational meeting is the first official meeting of your nonprofit! Some of the things that are discussed in a typical organizational meeting:

  • Taking attendance to show you have a quorum (minimum number needed)
  • Appointing temporary officers, chairmen, secretary, etc.
  • Adoption of the bylaws
  • Adoption of conflict of interest policy

Don’t forget to record “minutes” of the meeting and have it signed by all attending directors. Here are some corporate minutes templates to help you get the ball rolling.

NOTE: This meeting must occur before your organization can apply for 501(c)(3) federal tax exempt status.

Get an EIN

3) Get an EIN

An EIN or Employment Identification Number (also called a Federal Tax Identification Number or Federal Employment Identification Number), is used to uniquely identify a business entity. You can think of the EIN as a social security number for your nonprofit.

The EIN is required for your organization whether or not it will have any employees.

The EIN will be used for things like:

  • Filing for 501(c)3 status
  • Opening a bank account
  • Applying for tax-exempt status
  • Submitting tax returns

Once your nonprofit is formed with the Secretary of State, you can easily apply for an EIN for your nonprofit via the IRS online application. This is the fastest method as you’ll get your EIN as soon as you complete the application.

NOTE: If you use a nonprofit formation service, EIN assistance might already be included in the package.

 

4) Get a Louisiana State Tax Identification Number

Your organization will need to apply for a State Taxpayer Identification Number using Form R-16019

You can apply online or by mail. It will take about 3 business days to process if you are applying online. If you are applying by mail, expect the processing to take 4-6 weeks.

 

Start a Business Bank Account

5) Start a Business Bank Account

You will typically need to take with you the following items to open a bank account for your nonprofit:

  1. The EIN for the nonprofit
  2. A copy of the nonprofit’s bylaws
  3. A copy of the Articles of Incorporation

If your nonprofit has several directors or officers, some banks may also ask for proof that you are authorized to open the account on behalf of the nonprofit.

There are many great options when it comes to picking a bank. Here are the reviews of the top 5 business bank accounts we recommend.

NOTE: It is always best to call ahead. Your bank may require some additional documents.

 

6) Start a Corporate Records Book (Optional)

As a nonprofit corporation, your organization will need to keep track of many important documents. This includes documents such as:

  • The Articles of Incorporation
  • EIN
  • Tax forms
  • Nonprofit bylaws
  • Meeting minutes

We recommend starting a dedicated corporate records book early so that as you start receiving these critical legal documents, they can be kept organized from the very beginning.

While you can keep track of everything using supplies from any office store, it may be easier to use a pre-assembled kit that has the things you need in one place. Blumberg and Bindertek have some options specifically designed to meet the needs of nonprofit corporations.

How to Apply for Tax Exemptions

Once your nonprofit has received the 501(c)(3) letter of determination from the IRS, that letter will also allow your organization to be exempt from paying income tax to the state of Louisiana.

 

Applying for Exemption from Federal Taxes (501c3 status)

Before your nonprofit can apply for 501(c)(3) status it must:

  1. File the Articles of Incorporation with the required provisions
  2. Adopt the bylaws and the conflict of interest policy
  3. Have an EIN number

In order to file for tax-exempt status, most organizations will need to file Form 1023 online or by mail (fee: $600).

There are two exceptions:

  1. If your organization’s annual gross receipts are below $50,000 then you may be able to file Form 1023-EZ (fee: $275). Check your eligibility here.
  2. If your organization is a religious institution or has annual gross receipts in each taxable year of no more than $5,000 you may be considered tax-exempt without filing Form 1023.

Religious institutions and organizations with gross receipts under $5,000 can still choose to file Form 1023. This would give them a determination letter that specifies that contributions to the organization are tax-deductible.

 

FAQ:

When should an organization apply for federal tax exemption?
Form 1023/1023-EZ must be filed within 27 months from the end of the first month your organization was created.

How long will it take for the IRS to process Form 1023/1023-EZ?
Soon after sending your application you should receive an acknowledgment of receipt of your application.

If your application is simple and complete, IRS will send your determination letter within:

  • 90 days for Form 1023-EZ
  • 180 days for Form 1023

If you have not heard from them by that time you can call 877-829-5500 to enquire about your application.

 

Applying for Exemption from State Taxes

Once you have received your Letter of Determination from the IRS, submit a copy of that letter to the Louisiana Department of Revenue to be exempt from state taxes.

Department of Revenue
P.O. Box 201
Baton Rouge, LA 70821-0201

617 North Third Street
Baton Rouge, LA 70802

855-307-3893 or 225-219-7462
Website: http://www.revenue.louisiana.gov/

If you would like to apply to be exempt from sales taxes, you can use form R-1048.

Protect Your Nonprofit

Get Insurance Coverage

As with any other business, there may be risks involved in running the nonprofit. Getting insurance for your nonprofit allows you to focus on your passion while minimizing your liability.

Here are some of the common types of insurance you may want to consider for your organization:

  • General Liability Coverage
  • Directors and Officers Coverage
  • Social Service Professional Coverage

Your coverage needs will vary based on your organization and the work you do.

Properly Signing Legal Documents

There will be times when you will be signing a document on behalf of your nonprofit. It is important that these times are easily distinguishable from when you are signing a document as an individual. If a document isn’t properly signed, you might suddenly find yourself personally responsible for something the organization should have been liable for.

To avoid such confusion we recommend you and all the members of your organization follow the following format:

  1. The official name of your nonprofit
  2. Your signature
  3. Your full legal name
  4. Your position in the organization

Keep Your Nonprofit Compliant

Registered Agent

To stay compliant with the rules of Louisiana you must maintain a registered agent with a Louisiana address at all times

 

Louisiana Annual Reports

Every year before the anniversary of the registration of your nonprofit corporation you must file an annual report to make sure the information about your organization on record stays up to date. 

You can easily file this online. If it is not filed for 3 years your business may be revoked or dissolved.

 

Employees

If your organization will have employees you must register with the Louisiana Workforce Commission and get an unemployment tax employer account number.

You can easily apply online or contact the workforce commission at:

Louisiana Workforce Commission
1001 N. 23rd Street
Baton Rouge, LA 70802

Information: 866-783-5567 

Website: http://www.laworks.net/default.asp

 

Public Inspection Rules for 501(c)(3) Organizations

Organizations that have been granted the 501(c)(3) status are required to disclose the following documents to the public when requested:

  • Annual returns for 3 years after the due date (this includes returns like Form 990, 990-EZ, 990-PF, and any Forms 990-T)
  • All Form 990 Schedules (except portions of Schedule B), attachments and supporting documents.
  • Application of exemption and all supporting documents such as Form 1023
  • The official paperwork from the IRS that shows that your organization has tax-exempt status.

The following do NOT need to be shared with the public

  • Portions of schedule B of Form 990/990-EZ that identify the contributors. ( You only need to disclose the amount contributed and the nature of the contributions)
  • Any unfavorable rulings such as an earlier denial of tax-exempt status.
  • Any information the IRS has said you can withhold. This may include things like sensitive patents and trade secrets.

FAQ:

How long do I have to produce these documents if requested? 
Ideally within the same day. If your organization doesn’t have an office or maintains limited hours during parts of the year, the information should be made available within two weeks.

Do I need to provide copies of the documents? 
If someone asks for copies in person or in writing you must provide them with copies.

Can I charge for copies? 
You can charge a reasonable amount for making copies of the documents requested.

NOTE: It may be easiest to have the documents available on your website so that anyone who requests copies can be sent to the site. This allows you to stay compliant without having to spend a lot of time dealing with document requests. 

 

Annual Returns for Tax-Exempt Organizations

Most tax-exempt nonprofit organizations are required to file an annual return with the IRS (Click here for a list of exceptions).

Which form you should use to file the annual returns depend on the annual gross receipt amounts for your organization.

"Gross receipt" is defined by the IRS as “the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses”

  • For gross receipts < $50,000 --- File 990-N
  • Gross receipts <$200,000 and total assets <$500,000 --- File 990- EZ
  • Gross receipts > $200,000 or total assets > $500,00 --- File 990

For any questions, you can call the IRS at

  1. (800) 829-3676 (form-related questions)
  2. (800) 829-1040 (general information)

 

FAQ:

When is form 990 due?
You have a little over 4 months after your taxable year comes to an end to file Form 990. It is due on the 15th day of the 5th month. So if your taxable year ends on Dec 31st, your form 990 is due on May 15th.

NOTE: If your organization fails to file form 990 for 3 consecutive years, it will automatically lose its tax-exempt status.

 

Unrelated Business Income

If your organization has a gross income of >$1000 from a trade or business that is not related to the stated purpose of the organization, then it must file Form 990-T to pay tax on that income.

If you expect to pay $500 or more for the year in taxes on unrelated business income, your organization must pay a quarterly estimated tax on the unrelated business income using Form 990-W.