Step 1) Secure Your Nonprofit Name
In Michigan, the first step to forming a nonprofit corporation is naming it. Some rules for your nonprofit name are that it must be distinguishable from any registered Michigan entity name, and cannot deceive about the organization's purpose. (See this page of the Michigan LARA website for more information.)
Be sure to conduct a business entity search through the state to check for naming conflicts. If you don't want to wait to lock down your name until filing the Articles of Incorporation (Step 5), you can reserve it for 6 months.
Filing Fee: $10Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your organization. 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 website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name now.
Step 2) Appoint A Registered Agent
When starting a nonprofit, you are required to designate a registered agent to handle official documents on behalf of your organization.
They must be a resident of Michigan, or a business entity that's registered with the state. Either way, they must have a physical MI address where they’re available during normal business hours (Monday through Friday, 9 am to 5 pm).
You can designate a registered agent by electing someone within your company, hiring an outside professional, or forming your nonprofit through a service like IncFile to get a registered agent free of charge for one year.
Step 3) Select Incorporators & Directors
By definition, all an incorporator does is sign and “execute” the Articles of Incorporation and submit them to the state. You’ll need to appoint at least one. As for initial directors, you’ll need to select a minimum of three. It’ll be their job to oversee the nonprofit until your first board meeting when official directors will be voted in (learn more).
If this is all brand new to you, check out the Board Roles & Responsibilities page from the National Council of Nonprofits for more information. Working with an attorney or incorporation provider really comes in handy during this foundational step since there are a lot of corporate formalities involved.
Step 4) Draft Nonprofit Bylaws
Without bylaws, your nonprofit will be subject to the default rules and statutes set by the state, which may not suit the circumstances of your organization at all.
Common nonprofit bylaw topics include:
- Outline of management, procedures and responsibilities of the board
- What decisions can/cannot be made without a formal meeting
- Detailed info on each office (President, Secretary, Treasurer, etc.)
- How to go about adding/amending bylaws
- How to handle assets upon dissolution
Step 5) File Articles Of Incorporation
Once you and your team decide it’s time to officially form the nonprofit corporation, you’ll need to file nonprofit Articles of Incorporation with the state.
Some of the information you’ll need to disclose on this document includes:
- The nonprofit name, type, duration of existence, and statement of purpose
- Complete names & addresses of registered agent and incorporators
- Any specific provisions/bylaws set forth as part of the internal operations of your organization
- A stipulation of apportioning assets to any 501(c)(3) upon termination of the organization
Filing Fee: $20
Step 6) Start A Corporate Records Book
While not required by law, this is a very common practice among both nonprofit and for-profit corporations. Your corporate records book is where you’ll keep all critical documents (including registration papers, licenses and permits, meeting minutes, etc.) to ensure you’re well-organized and fully compliant.
You can find a sufficient records binder at a nearby office supply store or on Amazon, but we’re huge fans of corporate kits, which include gorgeous branded pieces like engraved binders and embossing seals!
Step 7) Conduct Initial Meeting
Now it’s time to conduct your first nonprofit meeting, which will be very organizational/foundational in nature.The meeting agenda should look something like this:
- Take attendance and show you have a quorum (minimum number needed)
- Appoint critical officers
- Adopt or amend bylaws designed in Step 4
- Decide on a bank and create banking resolution
- Establish a tax year/accounting period
Step 8) Get An EIN
An EIN, or Employer Identification Number, is required by both state and federal governments for essentially the same reason individuals are required to have SSNs.
The nine-digit number will be used to track your organization’s financial activity, and make it possible to open a business bank account and hire paid employees. Pretty much every major transaction your nonprofit engages in will require an EIN.
That said, you can get one easily and free of charge by applying online through the IRS Website.