Step 1) Verify & Secure Nonprofit Name
The first part of establishing your nonprofit's name is checking to see that it's, as stipulated in the Articles of Incorporation, "The name of any nonprofit corporation must be “distinguishable upon the records of the secretary of state.”
So be sure and conduct a Business Entity Search through the state, or as many as it takes to verify the name you want is available/acceptable.
Don't spend any money on filing forms until you have secure the name! If needed, you can file a Reservation of Entity Name (Form 620) with the state to protect it while forming.
Filing Fee: $50Quick 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
All business entities need to have a registered agent for, well, essentially one reason – so they can’t say, “We never received that document.” to any state or federal agency. It will be your agent’s responsibility to officially receive and provide “Service of Process” to all state filings, tax documents, legal notices, and so on.
This is why they must have a RI address, be registered/certified with the state, and hold regular business hours.
That said, you can hire an outside professional and spend up to $160/yr, or get a registered agent free of charge for the first year when you Incorporate with IncFile. It’s a service we highly recommend to new nonprofits that need help but can’t afford legal assistance.
Step 3) Select Incorporators & Directors
Rhode Island requires a minimum of 1 incorporator – the individual(s) who are responsible for signing and often filing the Articles of Incorporation with the state. Pretty straightforward. However, if your nonprofit will be governed by a Board of Directors vs. members things can get more interesting.
Initial Directors are recruited to oversee the nonprofit while it’s being formed, then when you conduct your initial meeting in Step 7 directors are voted on/in. There is no maximum but at least 3 need to be listed in the Articles. If possible it’s a good idea to either hire the best nonprofit lawyer you can afford or partner with professional incorporation services who provide expert assistance.
Step 4) Draft Nonprofit Bylaws
Your nonprofit bylaws are your rules. They determine how your organization is governed and structured. All incorporated nonprofits need them because if they aren’t in place the default Rhode Island state rules take over which may not be helpful. Common bylaws topics:
- 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.
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 Articles of Incorporation (Form 200) 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: $35
Step 6) Start A Corporate Records Book
If you aren’t already familiar, a nonprofit records book is where you keep physical copies of the most important paperwork – Articles of Incorporation, Bylaws, Meeting Minutes, licenses & permits, current board members list, your annual and biannual 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 lays the foundation. Before we list common issues covered below, here’s a Corporate Minutes Template you can customize and use to get the ball rolling.
- You will appoint/vote in the initial board of directors.
- Consult the state code Title 7 - Ch. 7-6 for specifics on officers.
- Officially adopt bylaws, or address changes which need to be declared to the IRS.
- Approve getting an EIN, a bank account, assign committees, and more.
Step 8) Get An EIN
If you want your Rhode Island nonprofit to be compliant with the federal government, get through tax season smoothly, be able to legally hire team members to help with your efforts, and set up a business bank account…you must have an EIN or Employer Identification Number.
Think of it as a social security number for your organization. To get yours the easiest way is to submit a request through the IRS Website.