How to Form a Nonprofit in Virginia

Two people forming a nonprofit in Virginia

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OVERVIEW

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

To start a 501(c)(3) nonprofit corporation in Virginia 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:

In addition, most 501(c)(3) charities in Virginia will also want to apply for state sales and use tax exemptions using Form NP-1.

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

Step 1: Name Your Virginia 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 Virginia.

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

Nonprofit Naming Guidelines

  • The name of you pick for your organization must not include:
    • Words or phrases that might make the general public think your nonprofit was created to conduct any kind of business other than what they’ve been authorized to conduct.
    • Any words or terms that could be considered grossly offensive
    • The word redevelopment, unless it complies with Chapter 190 of the 1946 Acts of Assembly
  • The name need not include an organizational designation, such as “Inc.”, “Ltd.”, “Incorporated”, or “Company”
  • You can read the Secretary of State's official guidelines for the complete rules on naming a Virginia-based organization.

Is the Name Available?

The name of your nonprofit must be distinct from that of any other corporation in Virginia. 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 for your organization, you will want to make sure that a suitable URL is currently available on GoDaddy.

You may want to buy any URLs you are interested in, to make sure they are available when you are ready to finalize and 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 Virginia Registered Agent

A nonprofit corporation in Virginia is required to have a registered agent with a Virginia 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 Virginia or a corporation, such as a registered agent service, authorized to transact business in Virginia. 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. 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 Virginia 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 Virginia Articles of Incorporation

To become a nonprofit corporation in Virginia you must file SCC-819NP, the Articles of Incorporation of a Virginia Nonstock Corporation.

Here are the sections that you will need to complete.

Article 1: Corporate Name
Enter the name you selected in Step 1.

Article 2: Purposes
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
  • Scientific
  • Literary
  • Testing for public safety
  • Fostering national/international amateur sports competition
  • Preventing cruelty to animals/children

NOTE: You can read the IRS guidelines here.

Article 3: Members
Indicate whether or not your nonprofit corporation plans to have members. Sample text is provided on the form.

Article 4: Directors
The articles will need to clearly state how directors will be elected/appointed.

One of the following sentences must be included:

  • The directors shall be elected by the members
    OR
  • The directors shall elect their successors.

You are permitted to call directors trustees or something else, but you must be consistent throughout the articles of incorporation.

Article 5: Registered Agent & Registered Office
The registered agent can be:

  1. A resident of Virginia who is also either:
    1. An initial director of the nonprofit
    2. A member of the Virginia State Bar
  2. An entity registered to do business in Virginia

Enter the information of the registered agent you selected in Step 2.

Article 6: Initial Directors
At least 3 directors will need to be named.

When filling the form do not use any prefixes such as “Mr.” or “Ms.” and only use the suffix box for titles of lineage such as ‘Jr.’, ‘Sr.’, or ‘III’ but not for designations such as M.D. or Ph.D.

Since this document will become public record you may want to use a post office box address rather than the residential addresses of the directors to maintain privacy.

Enter the information of the directors selected in Step 3.

Article 7: Limitations & Restrictions
Use this section to spell out any limitations and restrictions that will apply to your organization. You should review IRS Publication 557 for more information as to what restrictions you should include for your organization-type.

Article 8: Effectiveness of Filing
Use this section of the articles of formation to formally state what the assets of the organization will be used for, and what will happen to the assets if the organization is dissolved.

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 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.

NOTE: You may add additional articles and provisions after this section and before the signature section.

Enter the date on the form and the name of the initial incorporators. Each initial incorporator will then need to sign the form.

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There are 2 ways to submit your Articles of Incorporation: online or by mail.

The filing fee is $75.

  • Checks for mailed forms must be made payable to the "Secretary of State"
  • Paying by credit card for online filings will incur a $2 convenience fee.

You can file your Articles of Incorporation through the State Corporation Commission's online portal.

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

State Corporation Commission
Office of the Clerk
P.O. Box 1197
Richmond, VA 23218-1197

Nonprofit Formation FAQ

How long does it take to process SCC-819NP?

If you file online it will take a day or two. If you file by mail expect to get a response in 1-3 weeks.

How do I contact the State Corporation Commission?

You can call for information at (804) 371-9733 or visit them at their website.

Operating Procedures & 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.

Apply for a State Tax ID

You will also want to apply for your state tax ID/account with the Virginia Department of Taxation. You can enter this information online or by mailing in Form R-1.

Virginia Department of Taxation
Registration Unit
P.O. Box 1114
Richmond, VA 23218-1114

For assistance, call 804.367.8037

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.

How to Apply for Tax Exemptions

Your nonprofit organization must apply to the IRS to be exempt from federal taxes.

NOTE: In Virginia, once you become exempt from federal taxes, you are automatically considered exempt from Virginia state taxes. No additional paperwork is required.

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 Articles of Formation with the required provisions (As covered in Step 4, Sections 2, 7, & 8)
  2. Adopt the bylaws and the 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 $5,000 you may be considered tax-exempt without filing Form 1023. Religious institutions and organizations with gross receipts under $5,000 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

Once you have received your 501(c) determination letter from the IRS, your corporation will automatically be exempt from state income taxes. No additional paperwork is needed.

To file to obtain sales and use tax exemption, you can apply online via the Virginia Department of Taxation’s website.

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

Get A Registered Agent

Nonprofits that have incorporated are required to maintain a registered agent with an office address in Virginia.

If the agent or the office address changes, you must fill out Form SCC635/834 online or request a copy be mailed to you by filling out this form.

NOTE: Failure to do so may result in termination of the corporation.

File Required Periodic Reports

Every year the Virginia State Corporation Commission will send a notice to the registered office with instructions on when the annual report is due.

You have the option to file the annual report online if there have been no changes to the directors or officer information on record. You may also request a form be mailed to you by filling out this form.

NOTE: Failure to file a requested report may result in termination of the corporation.

Determine Virginia Business Permits And Licenses

As a nonprofit in the state of Virginia, your organization will not need a general business license.

When you access Virginia Tax Nonprofit Online, you can easily print off a copy of your sales and use tax certificate.

To read more about taxes, catering, and to access contact details applicable to Virginia nonprofits, access the Virginia Tax website.

Fundraising

Any nonprofit who will be soliciting charitable contributions will need to register with the Virginia Department of Agriculture and Consumer Services.

You will need to submit the following:

  • Form 102
  • Articles of Incorporation
  • Bylaws
  • current Form 990
  • a list of officers, directors and principal executive officer
  • a copy of each contract with professional solicitors
  • A copy of the IRS 501(c)(3) determination letter

To:

Virginia Department of Agriculture and Consumer Services
P.O. Box 536
Richmond, VA 23218-0526

Information: (804) 786-1343
Website: www.vdacs.virginia.gov

Employees

If your organization will have employees you must register with Virginia Tax for employer withholding and unemployment insurance taxes.

For more information you can contact:

Virginia Department of Taxation
Office of Customer Services
P.O. Box 1115
Richmond, VA 23218-1115

Information: (804) 367-8037
Website: www.tax.virginia.gov

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.

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

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 Virginia Nonprofit Quicklinks