How to Form a Nonprofit in Utah

Two people forming a nonprofit in Utah

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OVERVIEW

To form a nonprofit corporation in Utah, follow the steps below. It is also advisable for your Utah nonprofit to obtain a 501(C)(3) status from the IRS, as this will enable federal tax exemption for your Utah nonprofit corporation. Learn more about 501(c)(3) nonprofits here.

To start a 501(c)(3) nonprofit corporation in Utah you must:

  1. Form a nonprofit corporation according to the rules of the state
  2. Apply for 501(c)(3) tax-exempt status with the IRS

You will need the following documents:

Forming a Nonprofit in Utah is easy, just follow these 4 steps

Step 1: Name Your Utah Nonprofit

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 Utah.

To learn more, read our How to Name a Nonprofit in Utah guide.

Nonprofit Naming Guidelines

  • The name need not include an organizational designation, such as “Inc.”, “Ltd.”, “Incorporated”, or “Company”
  • You can read the official guidelines for the complete rules on naming a Utah based organization.

Is the Name Available?

The name of your nonprofit must be distinct from that of any other corporation in Utah. Use the Business Entity Search to make sure the name you have selected has not already been taken.

Is the Website Domain Name Available?

If you plan to have a website, make sure a suitable URL is currently available. You can check at GoDaddy.

You may want to buy any URLs you are interested in right now to ensure their availability when you are ready to create your website.

Find a Domain Now

Service provided by GoDaddy.com

After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

Step 2: Appoint A Utah Registered Agent

A nonprofit corporation in Utah is required to have a registered agent with a Utah address.

What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.

Who can be a Registered Agent? A registered agent must be a resident of Utah or a corporation, such as a registered agent service, authorized to transact business in Utah. You may elect an individual within the company including yourself.

Incfile provides the first year of registered agent service free with nonprofit formation ($49 + State Fees)

Step 3: Select Your Board Members and Officers

The directors of a nonprofit are responsible for overseeing the operations of the organization. The directors come together to form a board.

Features of directors:

  • All the directors of an organization together form the board of directors.
  • The power and influence of the directors over the organization is as the board of directors, the directors do not have authority as individuals.
  • The board typically creates the policies that govern the nonprofit. The board of directors also oversee management-level hiring like that of the officers.

The officers of a nonprofit (such as the president or the secretary) are individuals with responsibilities, and the authority to execute based on their job descriptions.

Together, the officers and the board will come together to make up the organizational structure of your nonprofit.

An officer may also be on the board of directors and serve both roles if allowed to do so by the organizational bylaws created by your team.

The organization structure of your nonprofit in Utah MUST include at least 3 directors not related to each other.

To learn more, read our guide on how to select board members for your nonprofit.

Step 4: File The Utah Articles of Incorporation

To become a nonprofit corporation in Utah you must file the Nonprofit Articles of Incorporation with the Utah Department of Commerce, Division of Corporations & Commercial Code.

Here are the sections that you will need to complete:

Section 1: Name of Corporation
Enter the name you selected in Step 1.

Section 2: Purpose
Describe the purpose of your nonprofit organization.

In order to qualify for 501(c)(3) status, the organization’s purpose must explicitly be limited to one or more of the following:

  • Charitable
  • Religious
  • Educational
  • Scientific
  • Literary
  • Testing for public safety
  • Fostering national/international amateur sports competition
  • Preventing cruelty to animals/children

Section 3: Registered Agent
Enter the information of the registered agent you selected in Step 2.

Section 4: Incorporator(s)
The incorporator is the person who completes, signs, and submits the Articles of Incorporation. This person does not need to be a part of your organization. This can be you, or a lawyer helping you with the process of formation.

Enter the Name, address, and signature of the corporation’s incorporator(s). If needed you may attach an additional sheet to list all the incorporators.

Section 5: Voting Members
Indicate whether or not your nonprofit will have voting members.

Section 6: Shares
Indicate whether or not your nonprofit will issue shares. If so, how many and how they will be divided.

NOTE: If you are interested in having your nonprofit issue shares, we recommend you first talk to a lawyer to ensure that this will not affect your organization’s eligibility to apply for 501(c)(3) status.

Section 7: Assets
Use this section of the articles of formation to formally state that if the organization is dissolved, assets will be distributed in a manner consistent with the law.

To be eligible for 501(c)(3) status, you must convince the IRS that the organization’s assets will always only be used for the purposes approved under 501(c)(3) rules. To this end, you must include specific provisions ensuring that in the event your organization is dissolved, the assets of the organization will be used towards tax-exempt purposes.

Section 5 of this sample document provides an example of these provisions required for 501(c)(3) eligibility.

Section 8: Principal Address
Enter the primary address of the nonprofit organization.

Section 9: Directors
Enter the name and address of each of the directors you selected in Step 3. You must have at least 3 directors.

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There are two ways to submit your Articles of Incorporation: online or by mail.

The filing fee is $30.

  • Checks and money orders for mailed forms must be made payable to the "State of Utah"

File the Articles of Incorporation through the Department of Commerce's online portal.

Submit the Articles of Incorporation to the mailing address found below:

Utah Division of Corporations & Commercial Code
P.O. Box 146705
Salt Lake City Utah 84114-6705

Nonprofit Formation FAQ

How long does it take to process the Utah Nonprofit Articles of Incorporation?

Standard processing takes about 14 days, which can be expedited to ~2 days for an additional $75 expedite fee.

How do I contact the Division of Corporations & Commercial Code?

You can call for information at (801) 530-4849, fax them at (801) 530-6438, or visit them at their website.

Nonprofit Operating Procedures and Housekeeping

Draft Bylaws And Conflict Of Interest Policy

There are two documents that will be central to the running of your nonprofit:

Bylaws: These are the rules that determine how your organization will be 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 will be governed – the role of directors and officers
  • 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

NOTE: 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: These are the rules set to ensure that decisions being made for the nonprofit are based on what is best for the organization, and not being motivated by what is best for individuals.

Under Appendix A the IRS provides a sample Conflict of Interest Policy.

NOTE: You will want to have both these documents drafted before for your first organizational meeting

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
  • Adoption of conflict of interest policy

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.

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.

The EIN is required for your organization whether or not it will have any employees.

The EIN will be used for things like:

  • Filing for 501(c)(3) status
  • Opening a bank account
  • Applying for tax-exempt status
  • Submitting tax returns

Once your nonprofit is formed, you can apply for an EIN for your nonprofit via Form SS-4.

NOTE: If you use a nonprofit formation service, EIN assistance might already be included in the package.

Open A Business Bank Account

You will typically need to take with you the following items to open a bank account for your nonprofit:

  1. The EIN for the nonprofit
  2. A copy of the nonprofit’s bylaws
  3. A copy of the Articles of Incorporation

If your nonprofit has several directors or officers, some banks may also ask for proof that you are authorized to open the account on behalf of the nonprofit.

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.

NOTE: It is always best to call ahead. Your bank may require some additional documents.

Start a Corporate Records Book (Optional)

As a nonprofit corporation, your organization will need to keep track of many important documents. This includes documents such as:

  • Articles of Incorporation
  • EIN
  • Tax forms
  • Nonprofit bylaws
  • Meeting minutes

We recommend starting a dedicated corporate records book early 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.

Apply for Tax Exemptions

Your nonprofit organization must apply to both the IRS to be exempt from federal taxes, and to the Utah State Tax Commission exemption from state taxes.

Applying for Exemption from Federal Taxes - 501(c)(3) Status

Before your nonprofit can apply for 501(c)(3) status it must,

  1. File the Nonprofit Articles of Incorporation with the required provisions (As covered in Step 4, Sections 2 & 7)
  2. Adopt the bylaws and conflict of interest policy
  3. Have an EIN number

In order to file for tax-exempt status, most organizations will need to file Form 1023 online or by mail (fee: $600).

There are two exceptions:

  1. If your organization’s annual gross receipts are below $50,000 then you may be able to file Form 1023-EZ (fee: $275). Check your eligibility here.
  2. If your organization is a religious institution
    or has annual gross receipts in each taxable year of no more than $5000
    you may be considered tax-exempt without filing Form 1023.

Religious institutions and organizations with gross receipts under $5000 can still choose to file Form 1023. This would give them a determination letter that specifies that contributions to the organization are tax-deductible.

Applying for Exemption from State Taxes

To be exempt from Utah Corporate Income Tax you must file Form TC-161.

Once you receive the IRS determination letter you must submit the following to the Utah State Tax Commission to receive your sales tax exemption number (“N” number)

  • Form TC-160.
  • Copy of IRS determination letter

Utah State Tax Commission
Technical Research
Unit 210 N 1950 West
Salt Lake City, UT 84134-3212

Information: (801) 297-2200
Website: www.tax.utah.gov

Nonprofit Tax FAQ

When should an organization apply for federal tax exemption?

Form 1023/1023-EZ must be filed within 27 months from the end of the first month your organization was created.

How long will it take for the IRS to process Form 1023/1023-EZ?

Soon after sending your application you should receive an acknowledgment of receipt of your application.

If your application is simple and complete, IRS will send your determination letter within

  • 90 days for Form 1023-EZ
  • 180 days for Form 1023

If you have not heard from them by that time you can call (877) 829-5500 to enquire about your application.

Protect Your Nonprofit

Get Business Insurance

As with any other business, there may be risks involved in running the nonprofit. Getting insurance for your nonprofit allows 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
  • Social Service Professional Coverage

Your coverage needs will vary based on your organization and the work you do.

Properly Sign 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:

  • The official name of your nonprofit
  • Your signature
  • Your full legal name
  • Your position in the organization

Keep Your Nonprofit Compliant

Register with the Utah State Tax Commission

Submit form TC-69 to the Utah State Tax Commission. This will allow your nonprofit to register for any tax accounts needed for your organization.

Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134

Phone: 801-297-2200
Fax: 801-297-3573
Website: tax.utah.gov/business

Fundraising

If your organization will be soliciting for funds, you must first register with the Department of Commerce, Division of Consumer Protection.

You will need to submit the following:

To:

Utah Department of Commerce
Division of Consumer Protection
160 East 300 South
SM Box 146704
Salt Lake City, UT 84114-6704

Phone: (801) 530-6601
Fax: (801) 530-6001
Website: consumerprotection.utah.gov

Filing Fee: $100

NOTE: You must renew your Charitable Organization Permit Application every year.

Employees

If your organization will have employees you must for an employer account for withholding and unemployment insurance taxes. This can be done using the Utah one-stop online business registration portal.

Public Inspection Rules for 501(c)(3) Organizations

A 501c3 organization must make the following documents available when demanded by any member of the public

  • 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 attachments and supporting documents. (For Schedule B you only need to disclose the amount contributed and the nature of the contributions)
  • 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 do not need to be disclosed
  • 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.

Documentation FAQ:

How long do I have to produce these documents if requested?
Ideally within 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.

Do I need to provide copies of the documents?
If someone asks for copies in person or in writing you must provide them with copies.

Can I charge for copies?
You can charge a reasonable amount for making copies of the documents requested.

NOTE: 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 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 annual gross receipt amounts for your organization.

‘Gross receipt’ is defined by the IRS as “the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses.”

  • For gross receipts < $50,000 --- File 990-N
  • Gross receipts <$200,000 and total assets <$500,000 --- File 990-EZ
  • Gross receipts > $200,000 or Total assets > $500,00 --- File 990

For any questions, you can call the IRS at

  1. (800) 829-3676 (Form-related questions)
  2. (800) 829-1040 (General information)

When is form 990 due?
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.

Report Unrelated Business Income

Unrelated Business Income

If your organization has a gross income of >$1000 from a trade or business that is not related to the stated purpose of the organization, then it must file Form 990-T to pay tax on that income.

If you expect to pay $500 or more for the year in taxes on unrelated business income, your organization must pay a quarterly estimated tax on the unrelated business income using Form 990-W.

State of Utah Nonprofit Quicklinks