STEP 1) SECURE YOUR NON-PROFIT NAME

Choose a Business Name

There’s a handful of things you need to know as you start tackling your non-profit organization’s name. First, it must be unlike any other registered name with the state – conduct a Business Entity Search to see if there are any naming conflicts. Also, the name can’t be deceptive and imply your non-profit does anything other than what you’ll state in your Articles of Incorporation in Step 5.

Secondly, you’ll need to include either the full words, “corporation,” “incorporated,” or “limited,” or their abbreviations. To look through the exact laws on the books, see Mass. Gen. Laws ch. 156B, § 11. If needed/available, you can file an Application for Reservation of Name to reserve for 60 days.

Filing Fee: $30

STEP 2) APPOINT A REGISTERED AGENT

Choose a Registered Agent

All business/non-profit entities need to have a registered agent for essentially one reason – so they can’t say, “We never received that document.” to any state or federal agency. It will be your Massachusetts Registered Agent that officially receives and provides “Service of Process” to all state filings, tax documents, legal notices, and so on. This is why they must have a MA address, be registered/certified with the state, and hold regular M-F business hours.

That said, you can hire an outside professional and spend up to $160/yr, or get a registered agent free of charge for the first year when you incorporate with IncFile or CorpNet. It’s a service we highly recommend to new non-profits that need help but can’t afford legal assistance.

STEP 3) SELECT INCORPORATORS & DIRECTORS

Choose the Initial Directors

Massachusetts requires a minimum of 1 incorporator  – the individual(s) responsible for signing/filing the Articles of Incorporation with the state. Pretty straightforward. However, if your non-profit will be governed by a Board of Directors vs. members things can get more interesting.

Initial Directors are recruited to oversee the non-profit while it’s being formed, then when you conduct your initial meeting in Step 7 directors are voted on/in. While the state only requires one director, more are advised – treasurer, president, secretary, etc. 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 in terms of incorporators and directors.

STEP 4) DRAFT NON-PROFIT BYLAWS

Register an LLCYour non-profit bylaws are your rules. They determine how your organization is governed and structured. All incorporated non-profits need them because if they aren’t in place the default state rules take over which may not be helpful. Common bylaws cover 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 Massachusetts.

Be sure to read through Section 17 in the statutes pertaining to bylaws, and 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

Business Licenses

Once all the previous steps are covered, and you and your board/members are ready, incorporators should sign and file Articles of Incorporation (here’s a link to the PDF Form) with the Sec. of State. 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: $35

STEP 6) START A NON-PROFIT RECORDS BOOKS

File Annual Reports & Publication RequirementsIf you’re audited, a corporate or non-profit records book/binder is what you’ll need to show the IRS. 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, receipts of major transactions, and so on.

As the name of the book implies, it’s a record holder of your MA 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 non-profit. In this meeting, you must decide on important matters including:

  • Non-profit bylaws approval,
  • Designation of officers and committees,
  • Non-profit accounting and tax period,
  • Approval of initial transactions and establishing a corporate bank account (Step 10).

Make sure that you prepare the minutes of the meeting; your attending board of directors will need to sign the document. If needed, check out this great Corporate Minutes Template which you can customize.

STEP 8) GET AN EIN

Get an EIN for Your LLC

What’s an EIN? For all legally registered business entities, as well as non-profit entities, they are a 9-digit federal “Employer Identification Number.” It’s used to track your business activity to ensure compliance, allow you to set up an official bank account, legally hire team members/employees, and so on.

While in the past it used to be a bit of a pain, these days you can get one quick, free, and easy by submitting an application online directly through the IRS Website.

STEP 9) HANDLE LICENSING & TAXATION

Small Business TaxesAfter all the big steps above your non-profit should be ready to obtain the proper licensing/permits as well as tax-exempt status to become 100% compliant on the local, state, and federal levels.

  1. File a Form 1023 federal tax exemption application with the IRS.
  2. Get your MA tax exemptions after obtaining IRS 501(c)(3) exemption – visit the Dept. of Revenue page.
  3. Depending on your operation, you may need to register for fundraising through the Attorney General.
  4. If you need help, check out Business License Research packages that take care of some legwork.

Because of how well non-profits and startups work together, you might also consider bookmarking the Boston district office of the Small Business Administration and Mass.gov’s Business Services portal.

STEP 10) SETUP A BUSINESS BANK ACCOUNT

Best Business Bank Account

When you form a non-profit, it’s very important to keep all personal and business assets/accounts completely separate. So don’t take this lightly. Where should you start building the financial persona of your project/initiative? Who is offering the best overall services to corporate/non-profit clients, relative to location and other conveniences?

If you think it’ll be helpful, look into this short breakdown of Business Checking Accounts to start brushing up if all this is unfamiliar territory. Where your non-profit banks is a critical move, which is why it should be discussed at length in your initial meeting.

OPTIONAL) WORK ON A FUND-READY PLAN

Write a Business Plan

Because we’ve worked with legions of entrepreneurs of all shapes and sizes we understand there’s a large variety of approaches to planning any serious initiative or project. During the initial stages where budgets tend to be small it’s about ultra-fast evolution and establishing a platform. Later on down the road though, once it comes time to start really having an impact, plans become essential.

Things like your outreach methods, detailed mission statement, financials, etc., need to be presentation/fund-ready for investors, volunteer groups, VCs or Angel Funds. Even consumers these days in many niches want to know your non-profit is legitimate and not just another fly-by-night or scam.

QUICK LINKS TO NON-PROFIT PLANNING

OPTIONAL) PUBLISH A RESPONSIVE WEBSITE

Build a Business Website

Whether you want to talk expansion or impact potential, gathering donations online or offering people/search engines a way to investigate your initiative, a website is no longer optional. Thankfully these days there are tons of different one-stop-shop solutions that give you your own domain and dashboard and legions of different non-profit-friendly apps you can integrate at the click of a button.

Wix and SquareSpace are two great examples, or perhaps you would like to see what potential there is in learning How to Make a Website Using WordPress? Regardless, leverage the immense power of the digital realm and begin growing.

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 start a non-profit organization in Massachusetts 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 start a non-profit organization in Massachusetts or business in general, please consult with a lawyer or other accredited professional.