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 discover 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 Articles of Incorporation).
Now, two other things - bookmark Article 8 in state law on Nonprofit Corporations and pay special attention to the fact that if needed, you can file an Application for Reservation of Corp. Name form that’s good for 120 days.
Filing Fee: $25Quick 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
Your New Mexico Registered Agent is there so that your nonprofit always, and officially, receives important paperwork on time like state filings, legal notices, important tax forms, and so on.
This is why they must be either a registered individual citizen or business entity in the state, have a physical street address, and be available during all regular business hours/days.
That said, you can hire an outside professional service and expect to pay up to $160/year, or get a certified agent free when you incorporate your nonprofit with a service like IncFile. They handle this and more depending on your startup package.
Step 3) Select Incorporators & Directors
What are incorporators? That's easy, this is the individual (you can have more than one) who signs and then files your nonprofit Articles of Incorporation with the state in step 5.
They don't have to be an officer or director. Speaking of directors, you'll need to select at least 3 initial directors to oversee the nonprofit during formation until new more official directors can be voted on/in during your initial meeting in Step 7.
Bookmark the New Mexico Guide for Board Members of Charitable Orgs page because it has more details. 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 to learn for newcomers.
Step 4) Draft Nonprofit Bylaws
Incorporated nonprofits need to have bylaws, or rules, that first and foremost determine how it’s governed. They also state the mission of the nonprofit and steer it’s course. They're essential! Common bylaws touch on topics like:
- How meetings are to be conducted.
- How new officers and directors are elected.
- How voting takes place, disputes handled, and records kept/managed.
- Adding/Amending bylaws (any changes must be reported to the IRS after incorporation).
- How to handle other nonprofit organization formalities in the state of South Dakota.
Step 5) File Articles Of Incorporation
Once all the previous steps are covered, and you and your board/members are ready, incorporators should sign and file or "execute" Articles of Incorporation with the Sec. of State. Information you’ll need includes:
- The name, type, duration of existence, and statement of purpose (provisions for nonprofit vs corp);
- Complete names & addresses of registered agent (and office), incorporators, and directors.
- 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 your organization.
Filing Fee: $25 with $100-$150 Expedited Options
Step 6) Start A Corporate Records Book
What we’re talking about here is a physical book, or some call it a binder, where you put copies of the most important documents that comprise your nonprofit organization: formation/registration, core licenses & permits, corporate minutes, huge contracts, annual reports and taxation documents, etc.To get one for your nonprofit you can grab a quality records book at any nearby office supply store, order them online through Amazon, or get a professional Corporate Kit which let you brand the book/slip case, provide blank certificates, and more for as little as $99.
Step 7) Conduct Initial Meeting
For your first meeting assemble incorporators/directors and get ready to establish the foundation of your nonprofit. Be sure to record “minutes” of the meeting and all attendees and have it signed by directors for your records book. Topics you’ll cover will vary but should include:
- Voting on the appointment of critical officers;
- Voting on and approving/amending bylaws;
- Establishing a tax year as well as an accounting period;
- Approving initial transactions, committees, and more.
Step 8) Get An EIN
An EIN, or Employer Identification Number, is a 9-digit number required by all business and nonprofit entities under law in order to effectively track their financial activity. Think of it as a social security number for your nonprofit, but it will also make it possible to legally hire paid employees if needed and open up a bank account.
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.