Use the guide below to form a 501(c)(3) nonprofit in Michigan. 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.
In Michigan, the first step to forming a nonprofit or non-stock corporation is to name it, which becomes official when you file the Articles in Step 5. Some rules are that it must be distinguishable and can’t imply the organization is formed for any other purpose than stated in the mission statement.
See the state Filing Information Guide for more information. Then, before filing be sure and conduct a Business Entity Search through the state to check for naming conflicts. If needed, you can file a Name Reservation Application form with the Dept. of Licensing & regulatory Affairs that’s good for 120 days.
Filing Fee: $10
A Registered Agent performs “service of process”, or in other words they’re responsible for receiving and helping process important documents like state filings, legal notices, tax forms, etc. on behalf of your nonprofit. The agent can be an individual resident or a domestic/foreign business entity registered with the state. A physical street address is also required, of a registered office.
You can hire an outside professional service and expect to pay up to $160/year, or get a qualified agent free when incorporating a nonprofit through services like Harbor Compliance (see details). They handle this along with much more depending on your startup package.
Chances are you’re unfamiliar with the formal nature of nonprofit corporations. That’s okay, choosing to govern by a board of directors (you’ll need at least three) has a fair amount of upsides vs. being member or volunteer-run. The first being that you’ve got to assemble a team! Now incorporators are the individuals who execute the Articles of Incorporation in Step 5 – sign & file. As long as they’re 18 you’re good to go.
Bookmark the Board Roles & Responsibilities page from National Council of Nonprofits because it has more helpful information for directors. To be frank, working with an attorney or incorporation provider really comes in handy during this foundational step as well because there are definitely corporate formalities.
Without your own bylaws, your nonprofit would be subject to the default rules and statutes concerning these subjects which may not be suitable at all. Common nonprofit bylaws include:
Once you and your team decide it’s time to form the initial corporation, file your nonprofit Articles of Incorporation (domestic) or submit them via mail to the Sec. of State. Information you’ll need includes.
Filing Fee: $20
While not mandatory, this is very common practice among corporations/nonprofits because of the nature of these business entities. It’s in this book you should keep all critical pieces of red tape to ensure you’re well-organized, to protect your status legally, and come across professionally.
As the name of the book implies, it’s a record holder of your Michigan registration documents, licenses and permits, minutes of meetings, and other important documents. You can find them at nearby office supply stores or on Amazon, but we’re huge fans of Corporate Kits which include gorgeous records books/binders you can brand for as little as $99.
Your first meeting with the initial directors will be foundational and mark the beginning of your organization. You’ll need to record “minutes” of the meeting and have it signed by all attending directors. Here’s a Corporate Minutes Template you can also customize and use to get the ball rolling. Topics should include:
What’s this? Well, it’s a 9-digit number that state and federal agencies use to basically track your financial activity – for compliance of course. It’s just like a social security number, but for business/nonprofit entities. Once you have one you’ll be able to setup a formal bank account for your nonprofit and hire paid employees if needed.
Almost every transaction your nonprofit engages in will require an EIN. That said, you can get one quickly and free of charge by applying online through the IRS Website.
Now’s the point to ensure your nonprofit is 100% compliant in terms of not only licenses/permits, but state and federal taxes. You should be able to apply for tax exempt status now that the corporation is established.
Two other great sources of information, networking, and financial services are the Detroit district office of the Small Business Administration and the state’s LARA LLC Business Services page because nonprofits and the small business community work together in countless ways.
As a nonprofit you’re looking for financial utility and solutions that are geared for your needs – low fees, waved expenses, great online banking options, good interest rates (if your nonprofit maintains higher account balances) and other valuable services.
Take some time to shop around at local, state and national banks/credit unions until you find the best option. Also, if you haven’t already, consider appointing a Chief Financial Officer (CFO) who’s knowledgeable and can help. If needed, check out this brief breakdown of Nonprofit Accounts to gain a better understanding and be sure to keep your nonprofit account 100% separate from all others.
If you’d like help forming a 501(c)(3) Nonprofit In Michigan, we highly recommend looking into Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.