Step 1) Secure Your Nonprofit Name
If it were too simple to secure a proper name for your nonprofit it wouldn’t be any fun! First, it must be unique and unlike any other business entity name registered with the state.
To uncover any naming conflicts, conduct a Business Entity Search until you know you have something unique that’s also aligned with your core mission statement (as stipulated in your Certificate of Incorporation).
Now, two other things:
- Bookmark Title 15A: 2-2 in state law on naming.
- Information about an optional paper reservation of the name that’s good for 120 days and fees for the service can be found here.
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 WEEBLY 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!
Step 2) Appoint A Registered Agent
A New Jersey Registered Agent can be an individual resident/citizen of the state or a legally registered domestic/foreign business entity with a physical NJ street address and regular M-F business hours.
On behalf of your nonprofit, they receive and help process important documents like state filings, tax forms, legal notices and so on. They’re essential and required by law.
That said, you can hire a 3rd party professional and expect to pay up to $160/year, or get a NJ Registered Agent free of charge when you start a nonprofit through Incfile. They handle this along with so much more depending on the startup package/service you choose.
Step 3) Select Incorporator(s) & Trustees
An incorporator (there can be more than one) is responsible for “executing” the Certificate of Incorporation with the state in Step 5. Pretty simple and the only real requirement is that they be over 18 year of age.
Trustees (as “board members” are known in NJ) bear far more responsibility. To begin you’ll recruit at least three Trustees (more are recommended) to oversee the organization until the election of their successor Trustees. If it’ll be helpful, bookmark the Basics in Nonprofit Corporate Governance by a lawyer through the American Bar Association that touches on primary Trustee responsibilities.
This is where the process can get complex and legal-heavy with corporate formalities, so it’s a good idea to work with either a lawyer or a nonprofit formation service who can help guide you and your team through this part of the process.
Step 4) Draft Nonprofit Bylaws
Bylaws are the rules/stipulations/regulations you create for how your nonprofit will be governed and managed along with the many other formalities that come along with having a board of Trustees vs a nonprofit that’s run expressly by members or volunteers. Common bylaws cover topics like:
- How meetings are to be conducted and how often (monthly, by-monthly, yearly, etc.),
- How new officers and Trustees are elected and their responsibilities,
- How voting takes place, disputes are handled, and how records are kept,
- Adding/Amending bylaws (any changes must be reported to the IRS after incorporation).
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.
Step 5) File Certificate Of Incorporation
Alright, if you’re ready to officially form your nonprofit corporation (if seeking religious corporation status, consider “Title 16” for reduced fees) in the eyes of the law and public record, be sure everything is correct with your Certificate of Incorporation and have your incorporator(s) sign/file them with the state. Be sure to include a cover letter and self-addressed/stamped return envelope.
You can file in-person at the corresponding state office, through mail which can take up to 4 weeks (there are expedited options), or through the NJ Online Filing Portal.
Filing Fee: $75
Step 6) Start A Corporate Records Book
If you aren’t already familiar, a corporate records book is where you keep physical copies of the most important paperwork – Certificate of Incorporation, Bylaws, Meeting Minutes, 501(c)(3) IRS Approval Letter, licenses and permits, current Trustee (and members, if the corporation has members) list, your annual reports, etc. Not mandatory, but very common and highly advised.
You can pick one up at pretty much any office supply store or online through Amazon of course, but we’re huge fans of savvy-sleek Corporate Kits which include gorgeous records books, binders, blank certificates and more which you can brand for as little as $99.
Step 7) Conduct Initial Meeting
The first meeting is in many ways the most important because it’s laying a foundation. Before we list common issues covered below, here’s a Corporate Minutes Template you can customize and use to get the ball rolling.
- Officially adopt bylaws, or address changes which need to be declared to the IRS,
- Elect at least 1 officer as Secretary, but you’ll also need a CEO, treasurer, etc., and
- Approve getting EIN in Step 8, a bank account, assign committees, and more.
Step 8) Get An EIN
An EIN, or Employer Identification Number, is required by both state and federal governments for essentially the same reasons individuals are required to have a SSN. It’s a nine-digit number that’s used to track nonprofit financial activity and makes it possible to open a business bank account, hire paid employees, if needed, and so on.
Almost every transaction your nonprofit engages in will require an EIN. That said, you can get one quickly, easily and free of charge by applying online through the IRS Website.