STEP 1) VERIFY & SECURE BRAND NAME

Choose a Business NameYour first step to forming a rock solid non-profit organization is to verify and secure its name. Now, there are a number of rules, but let’s go right to the statutes: 47-22-7. “The corporate name shall not contain any word or phrase which indicates or implies that it is organized for any purpose other than one or more of the purposes contained in its articles of incorporation.”

Bookmark the entire Chapter 47-22 as well so you can get all the particulars to save time. Also, be sure to conduct a Business Entity Search through the state to streamline your research into potential naming conflicts. If needed, file an Application for Reservation of Name to protect it for 120 days or until you file.

Filing Fee: $25

STEP 2) APPOINT A REGISTERED AGENT

Choose a Registered Agent

Your registered agent will be a legal representative of your non-profit, but not in a lawyer or attorney-sense. It’s their job to officially receive/process critical documents like state filings, legal notices, tax forms, and so forth. This is why they have to be either a SD resident individual/citizen or a legally registered business entity with a street address and be reliable during all regular business days/hours.

For most the two options they confront are either a) hiring an outside 3rd party which can cost upwards of $160/yr, or they get cheaper rates or deals through providers. For example, when you incorporate with IncFile or Incorporate.com they provide a registered agent for free for the first year.

STEP 3) SELECT INCORPORATORS & DIRECTORS

Choose the Initial Directors

South Dakota requires your non-profit have at least 3 initial incorporators who among other things are responsible for filing the Articles of Incorporation with the state in Step 5. You’ll also need to select at least 3 initial Directors who will oversee the non-profit until your first meeting in Step 7 where official Directors can be voted in.

Because this part can get complex thanks to the legal/tax/corporate natures of non-profits, if possible it’s a good idea to either hire the best non-profit lawyer you can afford or partner with professional incorporation services who can provide expert assistance to see it’s done right and you fully understand what’s going on in terms of incorporators and directors of your board.

STEP 4) DRAFT NON-PROFIT BYLAWS

Register an LLC

Incorporated non-profits need to have bylaws, or rules, that first and foremost determine how it’s governed. They also state the mission of the non-profit and steer it’s course. They are essential. Common bylaws touch on 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 non-profit organization formalities in the state of South Dakota.

If this is all new to you, use this savvy Corporate Bylaws Template which you can customize for your non-profit and get an idea of the paperwork-side of bylaws.

STEP 5) FILE ARTICLES OF INCORPORATION

How to Choose a Business Structure

Once you and your team decide it’s time to form and fully incorporate in the eyes of the law/public record, file your non-profit Articles of Incorporation with the Sec. of State either through mail or online. Information you’ll need includes:

  • The name, type, duration of existence, and statement of purpose (provisions for non-profit 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: $30

STEP 6) SET-UP A CORPORATE RECORDS BOOK

File Annual Reports & Publication Requirements

If you’re audited, a corporate or non-profit records book/binder is what you’ll need to show them. 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, and so on.

As the name of the book implies, it’s a record holder of your SD 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

Hold a Meeting with Your Board of DirectorsAlso called the organizational meeting, the first meeting of the board of directors marks the beginning of your South Dakota non-profit. In this meeting, you must decide on the following agenda:

  • Non-profit bylaws approval,
  • Designation of officers,
  • Non-profit accounting and tax period and,
  • Approval of initial transactions and application of a corporate bank account.

Make sure that you prepare the minutes of the meeting; your board of directors should also sign it. For safekeeping, it should be kept in your Corporate Records Books.

STEP 8) GET AN EIN

Get an EIN for Your LLC

An EIN is an Employer Identification Number and your non-profit organization will need one to be compliant on the federal as well as state levels whether you intend on hiring official employees or not. Why? Well, through this number relevant agencies track your financials through your bank account which you need an EIN to create (Step 10).

Now, while there are a number of ways to get one, the quickest and easiest way is to apply/request one directly through the IRS Website.

STEP 9) APPLY FOR FEDERAL AND STATE TAX EXEMPTIONS

Small Business Taxes

With everything above taken care of, start looking at gaining your exemption status and becoming compliant in terms of any needed licenses/permits. If you don’t have legal representation, below are a bunch of resources to get you started.

Two other great resources would be the Sioux Falls district office of the Small Business Administration and the state’s Business Tax Division site because they’re likely going to be go-to sources for tons of valuable information and connections to financial/non-profit services.

STEP 10) OPEN A BUSINESS BANK ACCOUNT

Best Business Bank Account

How familiar are you with the perks, bonuses, incentives, and advantages of non-profit/business banking vs personal banking? There are tons of options with local, state, and national banks/credit unions so make sure you take some time to research. Don’t just establish your non-profit’s financials where you (or any of your directors/members) already conduct personal banking because they may not be ideal.

And another point, it’s essential that your organization’s finances are separate from any and all others. You should have a single branded stream funneling into your accounting software. If you’re interesting, this Checking Accounts article breaks down some of the basics.

OPTIONAL) WORK ON A FUND-READY PLAN

Write a Business Plan

Planning a non-profit isn’t somehow special or different than legitimately planning any other type of business entity. Your non-profit has a budget, it has marketing needs, it has a company mission/culture, it has competitors, it has demographics, it has a pitch and funding needs and so on. You get the idea. Question is, how well-planned will your non-profit be?

Will it be empowered by modern planning software? These days you can get beautiful “presentation-ready” plans created and formatted for print, PDF, Word, etc., in a fraction of the time it took to assemble the 40-page conventional plans of old.

QUICK LINKS TO NON-PROFIT PLANNING

  • Check out our guide to Non-Profit Planning Tools which breaks down of all the best software solutions to help you plan better.

OPTIONAL) PUBLISH A RESPONSIVE WEBSITE

Build a Business Website

Not every non-profit needs to make digital marketing the cornerstone of their growth strategy, or even put much emphasis into building a digital presence…but a website is necessary nonetheless. What will volunteers, partners, or donators find when they search for your brand name online to see what it’s about and what people might be saying?

There’s a lot of options to get running smoothly if you don’t have an in-house designer, for example Wix, SquareSpace, or WordPress. If you’re interested here’s a free/quick tutorial that shows you How to Make a Website using that incredibly popular platform to give you an idea of what’s involved.

Need Help Forming Your Organization?

Have a reliable incorporation service like IncFile or LegalZoom do the work for you. Just answer a few questions about your organization and they’ll take care of the paperwork.

Visit IncFile Or Visit LegalZoom

Note that this article on how to form a non-profit organization in South Dakota isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form a non-profit organization in South Dakota or business in general, please consult with a non-profit/corporate lawyer or other accredited professional.