Last Updated 06 September 2017 | By:

How To Form a 501(c)(3) Nonprofit In Virginia

How to Use this Guide

Use the guide below to form a 501(c)(3) nonprofit in Virginia. Keep in mind that the process requires forming a nonprofit corporation and getting tax-exempt status with the IRS.

Since the overall process is extremely complex, we highly recommend consulting with an attorney or using a service like Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.

Step 1) Secure Your NonProfit Name

Choose a Business Name

To secure and register your brand name it must be unique, not too similar to another registered name in Virginia, and shouldn’t contain any restricted wording. To check for naming conflicts, conduct a Business Entity Search through the state. You can also contact the Clerk’s Office of the VA Corporation Commission to check availability.

If needed, file an Application for Reservation of a Business Name form with the VA Corp. Commission that’s good for 120 days. Your name becomes official once your incorporator(s) file the Articles of Incorporation in Step 5.

Filing Fee: $10

Step 2) Appoint A Registered Agent

Choose a Registered Agent

A Registered Agent is a certified individual or business entity that acts as an intermediary, receiving and helping to handle/process all official documents on your nonprofit’s behalf. They must be a legal resident of the state or registered to conduct business and have a VA street address where they can be reached at all times during regular M-F work hours.

That said, you can hire an outside professional service and pay up to $160/year, or get an agent free of charge when you incorporate with Harbor Compliance (see details). They handle this along with so much more depending on your startup package.

Step 3) Select Incorporators & Directors

Choose the Initial Directors

As mentioned in Step 1, incorporators are the individuals responsible for executing the Articles of Incorporation with the state which officially declares the entity. Virginia only requires one. Then you’ll need to appoint at least 1 director who among other things will oversee the nonprofit until the first meeting (Step 7) where official directors can be voted on.

This part can be somewhat complex because of the legal/tax nature of nonprofits which is why it’s a good idea to either hire the best nonprofit lawyer you can afford or work with professional service providers. They can help you understand the ins and outs of choosing initial directors and so much more.

Step 4) Draft NonProfit Bylaws

Register an LLCThese are the operations and procedures that will govern your nonprofit organization, some of which will be stated in your Articles of Incorporation, for example how to handle assets upon dissolution. Some of the issues covered should include:

  • Holding meetings, electing officers and directors,
  • Keeping and managing your records,
  • Adding/Amending bylaws,
  • How to handle other corporate formalities required in Virginia.

To get started, check out a savvy Corporate Bylaws Template with an example that you can customize yourself. Also, the PDF “How to Start a Nonprofit: What You Need to Know” has lots of great information on this step.

Step 5) File Articles Of Incorporation

Business Licenses

Once you and your team decide it’s time to form the initial corporation, file your nonprofit Articles of Incorporation or submit them via mail to 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: $75

Step 6) Start A Corporate Records Book

File Annual Reports & Publication Requirements

While not mandatory, this is very common practice among corporations/nonprofits because of the nature of these business entities. It’s in this book you should keep all critical pieces of red tape to ensure you’re well-organized, to protect your status legally, and come across professionally.

As the name of the book implies, it’s a record holder of your Virginia registration documents, licenses and permits, minutes of meetings, and other important documents. You can find them at nearby office supply stores or on Amazon, but we’re huge fans of Corporate Kits which include gorgeous records books/binders you can brand for as little as $99.

Step 7) Conduct Initial Meeting

Hold a Meeting with Your Board of Directors

Your first meeting with the initial directors will be organizational meeting. You’ll need to record “minutes” of the meeting and have it signed by all attending directors. Here’s a Corporate Minutes Template you can also customize and use to get the ball rolling. Topics will include:

  • Appointing officers;
  • Approving/Amending bylaws;
  • Setting a tax year as well as an accounting period;
  • Approve initial transactions and more.

Step 8) Get An EIN

Get an EIN for Your LLC

An EIN is a federal “Employer Identification Number,” which for nonprofits is used primarily for processing taxes and tracking your financial activity to ensure it’s legal on both federal and state levels. It’s similar to a social security number but for business entities, that among other things allows you to legally hire employees and set up a bank account. You can get an EIN free and easy by submitting an online request through the IRS Website.

Also, you’ll need to apply for an account number with the VA Employment Commission. Head on over to the Employer Services section of the Virginia Employment Commission website for more information.

Step 9) Handle Licensing & Exemptions

Small Business Taxes

Now’s the point to ensure your nonprofit is 100% compliant in terms of not only licenses/permits, but state and federal taxes. You should be able to apply for tax exempt status now that the corporation is established.

  • Download IRS FORM 1023 – Application for the Recognition of Exemption under Section 501(c)(3).
  • Or Form 1023-EZ – streamlined form but must be under $50k annual gross receipts and $250k in assets.
  • Visit the Sec. of State’s VDACS and Dept. of Taxation to get more state-specific info.
  • Also, consider professional Business License Research packages that take care of the legwork for you.

A couple other great resources to bookmark are the Richmond district office of the Small Business Administration as well as the Virginia SBDC because they’ve got a huge variety of services and connections to just about everything in the state.

Step 10) Setup A Business Bank Account

Best Business Bank Account

First of all, your nonprofit’s financials need to be separate from all other accounts or streams of financial data. Don’t just assume you should set it up where you or your team already have personal bank accounts. Would that be convenient? Yes, but keep in mind there are plenty of options – local, state, and national banks as well as credit unions.

Try to look at the differences in fees, kickbacks, incentives and financial services on an annual basis when you do your comparisons. Just don’t be hasty. Do some homework.

Need Help?

How To Form a 501(c)(3) NonprofitIf you’d like help forming a 501(c)(3) Nonprofit In Virginia, we highly recommend looking into Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.

They handle everything on your behalf and be on-call for questions you have. If you’d like more info, visit their website or read our review.