How to Form a Nonprofit in Massachusetts

Use A Professional Service

A professional service will handle the entire incorporation process on your behalf, allowing you to focus on the other needs of your new business.

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Form a Nonprofit in Massachusetts

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 Massachusetts.

The name of your nonprofit must be distinct from any existing corporations in Massachusetts. It must also include “Limited”, “Incorporated” or “Corporation” or an abbreviation of one of those words. To check availability and secure your corporation’s name we recommend the following resources:

Here are the complete rules about naming your organization in Massachusetts.

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

Once you have decided on a URL, you can set up your professional email account (@yourNonprofit.com). Google's G Suite offers an easy to use business email service that comes with many handy tools including cloud storage space where you can share documents with everyone else in your organization. Try it for free.


Decide if you want to incorporate

Step 2: Decide if you Want to Incorporate

Not all non-profit organizations choose to become corporations. Non-profit organizations can choose to form in one of two ways:

  1. Unincorporated Non-Profit Associations
  2. Non-Profit Corporations

There are certain benefits to each option:

Unincorporated Non-Profit Associations

An unincorporated non-profit association is an unofficial way of forming a non-profit that does not require any legal paperwork. This option may be a suitable choice for low-risk, low-scale groups. In Massachusetts, this structure has the following features:

  • Requirement: In Massachusetts, an unincorporated non-profit needs a minimum of 3 people to come together for a cause.
  • Formation: No legal paperwork required.
  • Liability: Individual members are personally responsible for debts and legal issues that come against the organization.

NOTE: If you are only interested in forming an unincorporated non-profit, you can skip ahead to Section 2: How to Apply for Tax Exemptions


Non-Profit Corporations

A non-profit corporation is a more formal way of forming a non-profit. This option involves more paperwork and compliance but offers more protection for its members. In Massachusetts, this structure has the following features:

  • Requirement: A non-profit organization that needs to file a Certificate of Formation with the Secretary of State. Also requires bylaw adoption and paperwork filing
  • Personal Liability Protection: Organization is considered a separate legal entity from its members.
  • Credibility: This is especially helpful if an organization needs to raise larger funds.

NOTE: If you are interested in forming a non-profit corporation, continue onto steps 3-11 of this section below.

Appoint a Registered Agent

Step 3: Appoint a Registered Agent

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

A registered agent is a person or a business who will be responsible for receiving any legal documents on behalf of your nonprofit.

It is required that the registered agent must always be available at the address listed during normal business hours. So while you can legally list yourself as a registered agent, it will likely be more convenient to hire a third-party service for this purpose.

You can expect to pay up to $160/year for a third-party service, or you can get a qualified registered agent free of charge when you incorporate with Incfile.

If you decide not to incorporate your nonprofit organization you can still choose to file with the secretary of state a statement appointing a registered agent who will be authorized to receive all government and legal documents on behalf of your association.

All nonprofit corporations in Massachusetts must file a Certificate of Appointment of Resident Agent with the Secretary of the Commonwealth before submitting the articles of organization.

Decide how your organization will be managed

Step 4: Decide how your Organization will be Managed

If you have decided that being a nonprofit corporation is best for your organization, you must select at least one director who will be responsible for governing the nonprofit. In addition, you will need to decide on a president (who must be one of the directors), treasurer and clerk.

If you plan to apply for federal tax-exempt status for your organization, you must pick at least three directors who are not related to each other to fulfill IRS requirements.

Draft Bylaws and Conflict of Interest Policy

Step 5: Draft Bylaws and Conflict of Interest Policy

Now is a good time to start drafting the bylaws and conflict of interest policy documents for your nonprofit. These documents will be central to the running of your nonprofit and you will want to have both of these ready in time for your first organizational meeting (Step 6).

Bylaws are the rules that determine how your organization is 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 is governed – by a board (directors) or membership.
  • 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

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 contains the rules that ensure that the people governing the nonprofit are making decisions that are best for organization and not by what is best for them as an individual.

In Appendix A, the IRS provides a sample Conflict of Interest Policy. This would be a good place to start, especially if you plan to later apply for tax-exempt status at the federal level.

Conduct an Organizational Meeting

Step 6: 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 established in Step 5
  • Adoption of conflict of interest policy established in Step 5
  • 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.

Conduct an Organizational Meeting

Step 7: Start a Corporate Records Book

As a nonprofit, your organization will need to keep track of many important documents. This includes things like:

  • Articles of Organization
  • EIN
  • Tax forms
  • Nonprofit bylaws
  • Meeting minutes

We recommend having a dedicated corporate records book 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.

File Article of Formation

Step 8: File the Articles of Organization

To become a nonprofit corporation in Massachusetts, you must file the Articles of Organization // Online version

Here are the sections that you will need to complete.

Article I: Corporate Name
This is where you will put in the name you selected in step 1.

Article II: Purpose
Here is where you will describe the purpose of your organization.

NOTE: If you intend to seek federal tax-exempt status for your organization there is specific language required by the IRS that must be included in this section. Click here for the exact IRS guidelines.

Article III: Members
You will need to describe whether or not your organization will have members. If there will be members you may include details about the different categories of members and any rules governing them.

You are not required to go into detail here since those details will be covered in the organization’s bylaws (in Step #5)

Article IV: Other Lawful Provisions 
Use this space to put in any rules regarding the regulation and operation of your business.

NOTE: If you intend to seek federal tax-exempt status for your organization there is specific language required by the IRS that must be included here. Click here for the exact IRS guidelines.

Article V: Bylaws and Officers 
This article is to state that the organization has already adopted its bylaws and elected key officers such as directors, president and treasurer.

Article VII a: Office Address
Enter the office address for your organization.

Article VII b: Information about Officers
Enter the Name, home address and post office address (if applicable) of each director and officer of the organization.

Article VII c: Fiscal Year

Indicate when the fiscal(tax) year will end for your organization. (Most organizations pick Dec 31st)

Article VII d: Resident Agent Information

Enter information about the registered agent you appointed.

Execution
When you fill in the contact information, sign, and date the form, you are acting as the incorporator and affirming everything written in the form. The person acting as the incorporator does not need to be a director, officer or member of the nonprofit.

Submit the Articles of Organization to:

Secretary of State Address

Secretary of State
Corporations Division
Commonwealth of Massachusetts
One Ashburton Place, 17th Floor
Boston, MA 02108

Information: (617) 727-2850
Forms: (617) 727-9440
Website: www.sec.state.ma.us/cor/coridx.htm

The filing fee is $35. If you file online, the filing fee is $40.

 

FAQ:

Q: How long does it take to process the Massachusetts Articles of Organization?
A: If filed online it typically takes about 2 business days to hear back from the state. If you file by mail you can expect a response in 2-4 business days.

Get an EIN

Step 9: 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. You can apply for an EIN whether or not you plan to incorporate your nonprofit.

The EIN number will be used for many things including opening a bank account, applying for tax exemption status and submitting tax returns.

You can easily apply for an EIN via the IRS online application. This is the fastest method as you’ll get your EIN as soon as you complete the application. You can also apply by mail or fax.

Keep in mind, however, that if you are using a nonprofit formation service, EIN assistance might already be included in the package.

FAQ:

How do I get an EIN if I don't have a social security number?

An SSN is not required to get an EIN. You can simply fill out IRS Form SS-4 and leav section 7b blank. Then call the IRS at 267-941-1099 to complete your application.

Step 10: Register with the Attorney General

All nonprofits in the state of Massachusetts, regardless of their purpose, are required to apply to register as a charity.

Once you apply to the Attorney General Office, they will decide whether your organization will be categorized as a charity. Whether or not your nonprofit is classified as a charity, once registered with the Attorney General Office your organization can legally conduct business.

For this application you will need:

-The Articles of Organization
-List of the current officers/directors and their addresses
-Copy of the bylaws
-IRS letter designating it as 501(c)(3) tax exempt organization (if applicable)

The application must be sent to:

Office of the Attorney General
Non-Profit Organizations/Public Charities Division
One Ashburton Place
Boston, MA 02108

The filing fee of $100.

If your organization has solicited for donations in the past, or intends to solicit for donations in the future, you will also need to fill out and send Schedule A-2 with an additional $50 fee.

For more information you can contact the Attorney General’s office at
(617) 727-2200
or www.mass.gov/ago

Start a Business Bank Account

Step 11: 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

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

It is always best to call ahead and ask in case the bank requires any additional documents

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.

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Get $200 when you open a business checking account with Chase.

Having access to financing is essential for all nonprofits. Credit cards can be a great financial tool to help with the day to day running of your organization. There are many factors to consider when picking the right credit card for your organization. Learn about the best small business credit cards here.

How to Get Tax Exempt Status at the Federal or State Level

A nonprofit is like any other business in that it is expected to pay taxes at both the federal or state level.

Your nonprofit organization will need to specifically apply to the IRS to be exempt from federal taxes. If your nonprofit qualifies for 501(3)(c) tax exempt status it may qualify for exemptions at the state level.

 

Applying for Exemption from Federal Taxes

Most nonprofits apply to be recognized under section 501(c)(3).

In order to be approved as a 501(c)(3) organization, you must have included specific language in your Articles of Organization that shows that your organization will operate exclusively for one or more tax-exempt purposes.

The exact language that needs to be included depends on the nature of your particular organization. Click here for the IRS guidelines. We recommend that you seek legal counsel to help you craft your Articles of Organization.

This overview course created by the IRS. will help you understand the timeline and steps involved with the 501(c)(3) application.

On pages 68 & 69 of Publication 557 IRS provides a handy chart to help you determine which application form you would need to fill to apply for exemption from federal taxes.

 

Applying for Exemption from State Taxes

For Corporate Income Tax Exemption: Once your organization has received 501(c)(3) status, send a copy of the IRS determination letter along with a copy of the articles of organization to the Corporate Exemptions Division of the Massachusetts Department of Revenue.

For Sale Income Tax Exemption: Send a copy of the IRS determination letter along with a letter of explanation. The department will review your case and let you know whether your organization qualifies for exemption.

Nonprofit Unit
Department of Revenue
Data Integration Bureau
P.O. Box 7022
Boston, MA 02204

Information & Forms: (617) 887-6367
Website: www.dor.state.ma.us
Filing Fee: $0

Protect Your Nonprofit

Get Insurance Coverage

Nonprofits gets started out of a passion to make a difference in the world. It is important to realize that like in any other business, there may be risks involved in running the nonprofit.

Getting insurance for your nonprofit will allow 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
  • Improper Sexual Conduct Coverage
  • Social Service Professional Coverage

Your coverage needs will vary based on your business.

Business Insurance

How much will the right insurance cost you? Click here to find out.

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

Business License

Business licenses in the state of Massachusetts are regulated by individual counties and cities. Contact your local city clerk’s office to find the requirements for your organization in your area.

Annual Report

Your nonprofit is required to file an annual report by the 1st of November of each year with the Secretary of the Commonwealth’s office.

You can opt to mail your form or file it online.

Failing to file the annual report for two consecutive years may result in administrative dissolution of your organization.

Employees

If your organization will have employees you must register with the Massachusetts Division of Unemployment Assistance and the Massachusetts Department of Revenue.

You can file with the Massachusetts Division of Unemployment Assistance online or contact them at:

Massachusetts Division of Unemployment Assistance
Charles F. Hurley Building
19 Staniford Street
Boston, MA 02114

Information: 617-626-5075
Web Site: www.mass.gov/lwd/unemployment-insur/

You can refer to the Massachusetts Employer's Guide to Unemployment Insurance for additional information.

You can file with the Massachusetts Department of Revenue online or contact them at:

Nonprofit Unit
Department of Revenue
Data Integration Bureau
P.O. Box 7022
Boston, MA 02204

Information & Forms: (617) 887-6960
Website: www.dor.state.ma.us

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:

Q: How long do I have to produce these documents if requested? 
A: Ideally within in 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.

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

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

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 Federal 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 gross receipt amounts for your organization.

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

NOTE: All Private foundations, regardless of financial status should file 990-PF


For any questions, you can call the IRS at

(800) 829-3676 (Form related questions)
(800) 829-1040 (general information

FAQ:

Q: When is form 990 due?
A: 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.