Step 1) Verify & Secure Your Name
Okay, there's a handful of things you need to know as you start tackling your nonprofit organization's name. First, it must be unlike any other registered name with the state - conduct a Business Entity Search to see if there are any naming conflicts.
Also, the name can't be deceptive and imply your nonprofit does anything other than what you'll state in your Articles of Incorporation in Step 5.
If you want to read through the codes yourself, see Title 33 - Ch. 31 - Article 4. If needed, and once you know the name is available, you can file an Application to Reserve Corporate Name with the state and protect it for 120 days while you prepare bylaws, articles, etc.
Filing Fee: $10
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
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 SC 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
South Carolina 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 and they don't need to be listed in Articles, but if they are they're going to need to sign. If possible it’s a good idea to either hire the best nonprofit lawyer you can afford or partner with professional incorporation services who can provide expert assistance in terms of incorporators and directors.
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 state rules take over which may not be helpful. Common bylaws cover 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 Carolina.
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 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 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
Step 6) Get A Corporate Records Book
If you’re audited, a corporate or nonprofit records book/binder is what you’ll need to show the IRS. In fact, if there are any kind of disputes it is the records book which should contain documents covering the matter either through contracts, bylaws, minutes of meeting, tax forms, legal notices, receipts of major transactions, and so on.
As the name of the book implies, it’s a record holder of your SC registration, licenses and permits, and other critical paperwork. They’re very common in conjunction with modern “cloud-based” storage. You can pick one up at nearby office supply stores, online through Amazon, or for $99 get a professional Corporate Kit which you can brand and customize.
Step 7) Conduct Initial Meeting
Also called the organizational meeting, the first meeting of the board of directors marks the beginning of your South Carolina nonprofit. In this meeting, you must decide on important matters including:
- Nonprofit bylaws approval,
- Designation of officers and committees,
- Nonprofit accounting and tax period,
- Approval of initial transactions and establishing a corporate bank account.
Make sure that you prepare the minutes of the meeting; your attending board of directors will need to sign the document. If needed, check out a Corporate Minutes Template which you can customize.
Step 8) Get An EIN
What’s an EIN? For all legally registered business entities, as well as nonprofit entities, they are a 9-digit federal “Employer Identification Number.” It’s used to track your business activity to ensure compliance, allow you to set up an official bank account, legally hire team members/employees, and so on.
While in the past it used to be a bit of a pain, these days you can get one quick, free, and easy by submitting an application online directly through the IRS Website.