STEP 1) SECURE YOUR NON-PROFIT NAME

Choose a Business NameAlong with the three points below which are outlines in the This PDF Guide, be sure to conduct a Business Entity Search through the state to ensure the name isn’t already registered by another entity:

  • The name may not contain “bank,” “trust,” “trustee,” or related words without  approval from Commissioner of Financial Inst.
  • The name may not contain “cooperative” or any abbreviation of it unless an exception applies.
  • The Secretary of State will not accept a name that “is likely to mislead the public” or that is the same as, or “resembles so closely as to tend to deceive” either (i) a name that is already reserved with the Secretary of State or (ii) the name of a domestic corporation or foreign corporation qualified or registered in California, unless the existing corporation or the holder of the name reservation consents.

Also, if needed, you can file a Name Reservation Request form and reserve an available name for 60 days.

Filing Fee: $20

STEP 2) APPOINT A REGISTERED AGENT

Choose a Registered Agent

As a legal business entity you’ll need a California Registered Agent, or statutory agent, who is responsible for officially receiving critical notices and copies of important paperwork on behalf of your non-profit – legal notices, tax forms, state-level contracts, etc. They must be a California resident/citizen or registered business entity with a “registered office” at a physical street address that hold regular M-F business hours.

Now, you can hire an outside professional service and pay up to $160/year or get an agent free of charge when you incorporate with IncFile or BizFilings. They handle this and much more depending on your startup package.

STEP 3) SELECT INCORPORATORS & DIRECTORS

Choose the Initial DirectorsDepending on whether you’re a Public Benefit, Mutual Benefit, or Religious non-profit you’ll need to select incorporators that are tasked with executing your Articles of Incorporation with the state. You’ll also need initial directors who can oversee the non-profit while in the formation stage until in Step 7, in your initial meeting, official directors of the board are voted in.

Article 5. 5-1 provides some direction here, as does this “Basics in Non-Profit Governance” PDF, but ideally you’ll be able to work with either a non-profit attorney or incorporation provider who can make sure you understand all the formalities involved.

STEP 4) DRAFT NON-PROFIT BYLAWS

Register an LLC

You can’t have an incorporated non-profit without formal documented bylaws. These are the rules and stipulations that govern and manage your organization! You can find tons of info on recommended bylaws, but here are some common ones:

  • The frequency and process by which you holding meetings,
  • How you electing/appoint new officers and directors,
  • How you keep and manage records (see Step 6),
  • Adding/Amending bylaws,
  • How to handle other corporate formalities required in California.

Be sure to print out a savvy Corporate Bylaws Template so you can begin putting your initial bylaws together. They’re be voted and adopted in Step 7. If there are any changes or amendments to those stated in your Articles you’ll need to notify the right authorities so they can be reflected on the public record.

STEP 5) FILE ARTICLES OF INCORPORATION

Business Licenses

Filing Articles of Incorporation establishes your non-profit corporate entity in the eyes of the law and California public record. Some is basic information, but you must have other language that differentiates your non-profit from a for-profit corporation as well:

  • 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) START A CORPORATE RECORDS BINDER

File Annual Reports & Publication Requirements

While it’s true that data tracking and storage has for the most part gone digital, and the cloud is all the rage, what we’re referring to here is a traditional hard cover book or binder where all the most critical paperwork – state registration and filing documents, important contracts, licenses, meeting minutes, and so on. It’s not required by any means, but par for the course with non-profit and for-profit corps.

To get one for your non-profit you can grab a quality records book at any nearby office supply store, order them online through Amazon, or get a professional Corporate Kit which let you brand the book/slip case, provide blank certificates, and more for as little as $99.

STEP 7) CONDUCT AN INITIAL MEETING

Hold a Meeting with Your Board of DirectorsWhile this is a somewhat complex, or can be, initial meeting here’s some guidance from the CA Attorney General’s Guide for Charities,

“Agenda items for the first meeting typically involve organizational issues, such as adopting bylaws, electing officers, establishing a bank account, setting the accounting year and basic accounting procedures, planning a budget for the first year, and adopting procedures for safekeeping of minutes, bylaws, and other corporate records.

STEP 8) GET AN EIN

Get an EIN for Your LLC

What’s an EIN (also called an FEIN, or TIN) and what’s it for? First, it’s a 9-digit number the IRS assigns to your non-profit to allow you to smoothly file taxes and to track your financial activity to ensure compliance with non-profit tax laws. You can also use it to open an official bank account, legally hire paid employees if applicable and apply for certain licenses/permits.

That said, you can get one quickly, easily and free of charge by applying online through the IRS Website.

STEP 9) HANDLE LICENSING & EXEMPTIONS

Small Business Taxes

Now it’s time to ensure compliance on local, state, and federal levels and apply for exemptions in the process. Do keep in mind your non-profit will be subject to conventional California gambling laws.

Two other optional resources you could engage with right away are the closest CA district office of the Small Business Administration and Sec. of State’s Business Resources page. Never forget there’s endless possibilities when it comes to the marriage between the non-profit and business communities!

STEP 10) STARTUP A BUSINESS BANK ACCOUNT

Best Business Bank Account

If you browse through this list of Top 10 Checking Accounts for Non-Profits you’ll notice a few specific traits, and in many ways they determined how rough your non-profit’s journey will be in the first 2-5 years:

  • Solutions: where you choose to bank should have solutions that address your unique platform.
  • Variable Fees: focus on your volume demands as they typically start small and then scale over time.
  • Incentives: there are tons of incentives, kickbacks, and other financial services to consider.

And remember, your non-profit’s financials should be completely separated from accounts of any other kind and have strict access controls in place as well.

OPTIONAL) WORK ON A FUND-READY PLAN

Write a Business Plan

There are few things more enlightening to your entire non-profit team, and your donors and volunteers, then well-laid plans. Often non-profit core founders have the impact, visions, and goals driving them with no real focus on how to REALLY get there. Worse, non-profits fall to pieces with meager success because no foundation’s been built, no structure, to hold it and continue scaling.

A fund-ready plan is pretty straightforward actually, typically touching on core fundamentals like outreach methods, funding goals, executive summary, mission statement, programs, etc. If you need help setting all this up, we’re huge fans of a tool called LivePlan, which walks you through the entire process.

OPTIONAL) PUBLISH A RESPONSIVE WEBSITE

Build a Business Website

If you already have a website for your non-profit, as long as it’s mobile-friendly (responsive), you’re good to go. Websites are never done. They never stop growing and evolving as your platform does. But if you don’t have a site yet, it’s probably because you aren’t a designer and you either a) don’t have one you trust close by, b) don’t have the time for outsourcing.

The easiest place to get started is to head on over to website-builder platforms like Wix, SquareSpace and Weebly. They’re great for non-designer savvy teams and won’t break your budget.

Need Help Forming Your Organization?

Have a reliable non-profit filing service like Swyft Filings or LegalZoom do the work for you. Just answer a few questions about your organization and they’ll take care of the paperwork.

Visit Swyft Filings Or Visit LegalZoom

 Note that this article on how to form a non-profit organization in California 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 California or business in general, please consult with a lawyer or other accredited professional.