Use the guide below to form a 501(c)(3) nonprofit in Massachusetts. 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.
There’s a handful of things you need to know as you start tackling your nonprofit organization’s name. First, it must be unlike any other registered name with the state – conduct a Business Entity Search to see if there are any naming conflicts. Also, the name can’t be deceptive and imply your nonprofit does anything other than what you’ll state in your Articles of Incorporation in Step 5.
Secondly, you’ll need to include either the full words, “corporation,” “incorporated,” or “limited,” or their abbreviations. To look through the exact laws on the books, see Mass. Gen. Laws ch. 156B, § 11. If needed/available, you can file an Application for Reservation of Name to reserve for 60 days.
Filing Fee: $30
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!
All business/nonprofit entities need to have a registered agent for essentially one reason – so they can’t say, “We never received that document.” to any state or federal agency. It will be your Massachusetts Registered Agent that officially receives and provides “Service of Process” to all state filings, tax documents, legal notices, and so on. This is why they must have a MA address, be registered/certified with the state, and hold regular M-F business hours.
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.
Massachusetts requires a minimum of 1 incorporator – the individual(s) responsible for signing/filing the Articles of Incorporation with the state. Pretty straightforward. However, if your nonprofit will be governed by a Board of Directors vs. members things can get more interesting.
Initial Directors are recruited to oversee the nonprofit while it’s being formed, then when you conduct your initial meeting in Step 7 directors are voted on/in. While the state only requires one director, more are advised – treasurer, president, secretary, etc. If possible it’s a good idea to either hire the best nonprofit lawyer you can afford or partner with professional incorporation services who can provide expert assistance in terms of incorporators and directors.
Your nonprofit bylaws are your rules. They determine how your organization is governed and structured. All incorporated nonprofits need them because if they aren’t in place the default state rules take over which may not be helpful. Common bylaws cover topics like:
Be sure to read through Section 17 in the statutes pertaining to bylaws, and if this is all new to you, use a savvy Corporate Bylaws Template which you can customize for your nonprofit and get an idea of the paperwork-side of bylaws.
Once all the previous steps are covered, and you and your board/members are ready, incorporators should sign and file Articles of Incorporation (here’s a link to the PDF Form) with the Sec. of State. Information you’ll need includes:
Filing Fee: $35
If you’re audited, a corporate or nonprofit records book/binder is what you’ll need to show the IRS. In fact, if there are any kind of disputes it is the records book which should contain documents covering the matter either through contracts, bylaws, minutes of meeting, tax forms, legal notices, receipts of major transactions, and so on.
As the name of the book implies, it’s a record holder of your MA registration, licenses and permits, and other critical paperwork. They’re very common in conjunction with modern “cloud-based” storage. You can pick one up at nearby office supply stores, online through Amazon, or for $99 get a professional Corporate Kit which you can brand and customize.
Also called the organizational meeting, the first meeting of the board of directors marks the beginning of your nonprofit. In this meeting, you must decide on important matters including:
Make sure that you prepare the minutes of the meeting; your attending board of directors will need to sign the document. If needed, check out a great Corporate Minutes Template which you can customize.
What’s an EIN? For all legally registered business entities, as well as nonprofit entities, they are a 9-digit federal “Employer Identification Number.” It’s used to track your business activity to ensure compliance, allow you to set up an official bank account, legally hire team members/employees, and so on.
While in the past it used to be a bit of a pain, these days you can get one quick, free, and easy by submitting an application online directly through the IRS Website.
After all the big steps above your nonprofit should be ready to obtain the proper licensing/permits as well as tax-exempt status to become 100% compliant on the local, state, and federal levels.
When you form a nonprofit, it’s very important to keep all personal and business assets/accounts completely separate. So don’t take this lightly. Where should you start building the financial persona of your project/initiative? Who is offering the best overall services to corporate/nonprofit clients, relative to location and other conveniences?
If you think it’ll be helpful, look into this short breakdown of Business Checking Accounts to start brushing up if all this is unfamiliar territory. Where your nonprofit banks is a critical move, which is why it should be discussed at length in your initial meeting.
If you’d like help forming a 501(c)(3) Nonprofit In Massachusetts, we highly recommend looking into Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.