Form a Nonprofit in New Jersey
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 New Jersey.
The name of your nonprofit must be distinct from that of any existing corporations in New Jersey. Use the New Jersey Department of Treasury’s Business Records Service to check availability of the name.
Here are the official rules for naming a nonprofit in New Jersey.
If you plan to have a website for your organization, make sure that a suitable URL is currently available. You can check on GoDaddy.
You may want to buy any URLs you are interested in to make sure that they will be available when you are ready to finalize and create your website.
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.
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:
- Unincorporated Non-Profit Associations
- 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 New Jersey, this structure has the following features:
- Requirement: In New Jersey, an unincorporated non-profit needs a minimum of 2 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
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 New Jersey, this structure has the following features:
- Requirement: A non-profit organization will need to file a Public Records Filing as a New Business Entity with the New Jersey Department of the Treausry. Also requires bylaw adoption and other related paperwork.
- 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.
Step 3: Appoint a Registered Agent
A nonprofit corporation in New Jersey is required to have a registered agent with a New Jersey 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 by law 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 is usually more convenient to hire a third-party service for this purpose. If you list yourself as the registered agent, you must plan to be always available at that address every Monday-Friday from 9am to 5pm.
For a third-party registered agent service you can expect to pay up to $160/year, or you can get a qualified registered agent free of charge when you go through the process of incorporation with Incfile.
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 3 trustees who will be responsible for governing the nonprofit. In addition, your organization will need some officers such as President, secretary, and treasurer.
NOTE: It is important to keep in mind that the role of a trustee in a nonprofit is different from that of a director.
If you plan to apply for Federal tax-exempt status for your organization, you must pick at least 3 directors who are not related to each other to fulfill IRS requirements.
Step 5: Public Records Filing for New Business Entity
To become a nonprofit corporation in New Jersey you must file a Public Records Filing for New Business Entity with the NJ Department of the Treasury.
Here are the sections that you will need to complete:
Section 1: Entity Name and Type
This is where you will put in the Name you selected in step 1.
Section 2: Type of Business Entity
Put in the state code for your type of organization. The code for domestic nonprofits is ‘NP’.
Section 3: Business Purpose
Here is where you will describe the purpose of your nonprofit 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.
Section 4: Stock
Leave this section blank for your nonprofit.
Section 5: Duration
If your organization is planning to be in existence for a fixed amount of time put the end date here.
Most organizations are not started with an end date in mind. If this is the case for your nonprofit, leave this space blank.
Section 6 & 7: Leave Blank
If you are starting a domestic nonprofit, you can leave these sections blank.
Step 8: Contact Information
Write in the Name and Address of the registered agent you selected for your organization Step 3. All official correspondence will be sent to this address.
Step 9: Management
Write the Names and Addresses of at least three of your trustees from Step 4 .
Step 10: Incorporator
The incorporator can be any person helping the nonprofit incorporate. This can be you or your attorney. The incorporator does not need to be a part of the nonprofit.
You can file online or submit the completed form along with a cover letter and a self-addressed stamped envelope to:
New Jersey Dept. of the Treasury
Division of Revenue/Corporate Filing Unit
PO Box 308
Trenton, NJ 08646-0308
Information: (609) 292-9292
Fax: (609) 984-6849
Web Site: www.state.nj.us/njbgs/
There is a $75 processing fee with an additional $3.50 convenience fee if you apply online and pay by credit card.
As a nonprofit, your organization will need to keep track of many important documents. This includes things
Step 6: Start a Corporate Records Book
As a nonprofit, your organization will need to keep track of many important documents. This includes things like:
- Certificate of Formation
- 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.
Step 7: 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 8) .
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 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.
Step 8: 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 7
- Adoption of conflict of interest policy established in Step 7
- 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.
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.
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: Get a New Jersey State Tax Identification Number
Within 60 days of filing as a new business entity (Step 5), your organization will need to apply for a New Jersey Taxpayer Identification Number using Form NJ-REG Business Registration Application.
You can file online or submit the application to:
New Jersey Department of Revenue
PO Box 252
Trenton, NJ 08646-0252
Information: (609) 292-9292
Fax: (609) 292-4291
Web Site: www.state.nj.us/njbgs/
Filing Fee: $0
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:
- The EIN for the nonprofit
- A copy of the nonprofit’s bylaws
- 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.
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 Apply for Tax Exemptions
Your nonprofit organization can specifically apply to the IRS to be exempt from taxes federal taxes.
In New Jersey, a registered incorporated nonprofit is automatically exempt from the state’s corporate business tax.
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 Article of Formation 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 Certificate of formation.
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
As a registered incorporated nonprofit, your organization is automatically exempt from the New Jersey Corporation Business Tax. You may request an official confirmation of this from the NJ Department of Treasury Division of Taxation
Regulatory Services Branch
New Jersey Division of Taxation
PO Box 269
Trenton, NJ 08695
Information: (609) 292-5994
Web Site: http://www.state.nj.us/treasury/taxation/exemptcbt.shtml
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.
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:
- Official Name of your nonprofit
- Your Signature
- Your full legal name
- Your position in the organization
Keep Your Nonprofit Compliant
New Jersey Business Licenses
Business licenses in the state of New Jersey are regulated by individual counties and cities. Contact your local city clerk’s office to find the requirements for your organization in your area.
Rules for Soliciting for Donations
If your organization will be collecting more than $10,000 in charity, you must register as a charity using the CRI-200 Short
Your registration must be renewed every year, 6 months after the close of your fiscal year.
If your organization will have employees you must register with the New Jersey Department of Revenue.
You can easily apply online or contact the Department of Revenue at:
New Jersey Department of Revenue
PO Box 252
Trenton, NH 08646-0252
Information Phone Number: (609) 292-9292
Division of Taxation - Withholding Information: www.state.nj.us/treasury/taxation/freqqite.shtml
Department of Labor and Workforce Development: lwd.dol.state.nj.us/labor/ea/empinfo/eainfoindex.html
Note: This registration may also be completed in paper form using Form NJ-REG.
You can refer to the Department of Labor and Workforce Development's Employer Handbook for additional information.
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.
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.
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
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.