How to Use this Guide
Use this step-by-step guide to form a 501(c)(3) nonprofit in New Jersey.
Keep in mind that forming a nonprofit corporation and getting tax-exempt status with the IRS requires time and patience.
Since the overall process is extremely complex, we highly recommend consulting with an attorney or using a comprehensive service like Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.
If it were too simple to secure a proper name for your nonprofit it wouldn’t be any fun! First, it must be unique and unlike any other business entity name registered with the state. To uncover any naming conflicts, conduct a Business Entity Search until you know you have something unique that’s also aligned with your core mission statement (as stipulated in your Certificate of Incorporation).
Now, two other things:
A New Jersey Registered Agent can be an individual resident/citizen of the state or a legally registered domestic/foreign business entity with a physical NJ street address and regular M-F business hours.
On behalf of your nonprofit, they receive and help process important documents like state filings, tax forms, legal notices and so on. They’re essential and required by law.
That said, you can hire a 3rd party professional and expect to pay up to $160/year, or get a NJ Registered Agent free of charge when you start a nonprofit through Harbor Compliance. They handle this along with so much more depending on the startup package/service you choose.
An incorporator (there can be more than one) is responsible for “executing” the Certificate of Incorporation with the state in Step 5. Pretty simple and the only real requirement is that they be over 18 year of age.
Trustees (as “board members” are known in NJ) bear far more responsibility. To begin you’ll recruit at least three Trustees (more are recommended) to oversee the organization until the election of their successor Trustees. If it’ll be helpful, bookmark the Basics in Non-Profit Corporate Governance by a lawyer through the American Bar Association that touches on primary Trustee responsibilities.
This is where the process can get complex and legal-heavy with corporate formalities, so it’s a good idea to work with either a lawyer or a nonprofit formation service who can help guide you and your team through this part of the process.
Bylaws are the rules/stipulations/regulations you create for how your nonprofit will be governed and managed along with the many other formalities that come along with having a board of Trustees vs a nonprofit that’s run expressly by members or volunteers. Common bylaws cover topics like:
If this is all new to you, use a savvy Corporate Bylaws Template which you can customize for your nonprofit and get an idea of the paperwork side of bylaws.
Alright, if you’re ready to officially form your nonprofit corporation (if seeking religious corporation status, consider “Title 16” for reduced fees) in the eyes of the law and public record, be sure everything is correct with your Certificate of Incorporation and have your incorporator(s) sign/file them with the state. Be sure to include a cover letter and self-addressed/stamped return envelope.
You can file in-person at the corresponding state office, through mail which can take up to 4 weeks (there are expedited options), or through the NJ Online Filing Portal.
Filing Fee: $75
If you aren’t already familiar, a corporate records book is where you keep physical copies of the most important paperwork – Certificate of Incorporation, Bylaws, Meeting Minutes, 501(c)(3) IRS Approval Letter, licenses and permits, current Trustee (and members, if the corporation has members) list, your annual reports, etc. Not mandatory, but very common and highly advised.
You can pick one up at pretty much any office supply store or online through Amazon of course, but we’re huge fans of savvy-sleek Corporate Kits which include gorgeous records books, binders, blank certificates and more which you can brand for as little as $99.
The first meeting is in many ways the most important because it’s laying a foundation. Before we list common issues covered below, here’s a Corporate Minutes Template you can customize and use to get the ball rolling.
An EIN, or Employer Identification Number, is required by both state and federal governments for essentially the same reasons individuals are required to have a SSN. It’s a nine-digit number that’s used to track nonprofit financial activity and makes it possible to open a business bank account, hire paid employees, if needed, and so on.
Almost every transaction your nonprofit engages in will require an EIN. That said, you can get one quickly, easily and free of charge by applying online through the IRS Website.
Now’s the time to ensure your nonprofit is 100% compliant in terms of not only licenses/permits, but state and federal tax rules. You should be able to apply for tax exempt status once the corporation is established, as follows:
Also, if you need help, check out Business License Research packages that take care of some legwork. Other resources you might find especially valuable are the Newark district office of the Small Business Administration, the state’s Premier Business Services page, and the One-Stop Business Portal because there’s plenty of relevant information along with financial services.
In your initial meeting you and the board should have discussed where to set up your nonprofit’s financial groundwork – where to bank. This is no simple matter. You need to check out a good number of different local, state, and national banks as well as credit unions to get the lay of the land so to speak.
There’s a lot of variables to consider here, so to get your research going check out this brief breakdown of Nonprofit Accounts to gain a better understanding and be sure to keep your nonprofit account 100% separate from all others. Don’t let any other assets of data streams put your nonprofit at risk!
Use one of these reliable services & have all paperwork handled on your behalf. Each service offers a different level of features and pricing but all take care of incorporation and 501(c)(3) applications. No matter which you choose, you’ll be in good hands.
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Note that this guide on forming a New Jersey nonprofit 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 nonprofit organization in New Jersey, please consult with an other accredited professional. We recommend JGW INcounsel/John G. Webb, III, Esq.