Starting a nonprofit organization in Maryland is easy
To start a Maryland 501(c)(3) nonprofit organization, you'll need to first register a nonprofit corporation with the state of Maryland, and then apply for tax exempt status under section 501(c)(3) with the Internal Revenue Service.
Step 1: Name Your Maryland Nonprofit
The name you select for your nonprofit will establish its brand. It is the first thing most people will learn about your organization. It is important to pick a name that both aligns with your mission and follows the rules for naming in your state.
Maryland Nonprofit Naming Guidelines
The name you pick for your organization must include one of the following words or their abbreviation:
- "Company", (if it's not preceded by the word/symbol "and)"
You can read the official guidelines for the complete rules on naming a Maryland based organization.
To learn more, read our How to Name a Maryland Nonprofit guide.
Not sure what to name your business? Check out our Business Name Generator.
Is the URL available?
We recommend that you check online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.
Find a Domain Now
Now that you have verified your name and secured the URL you may select a professional service to complete the nonprofit formation process for you.
Northwest ($39 + state fee)
Step 2: Appoint a Maryland Registered Agent
A nonprofit corporation in Maryland is required to have a registered agent with a Maryland address.
What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.
Northwest provides the first year of registered agent service free with nonprofit formation ($39 + State Fees)
To learn more, read our Maryland Registered Agent guide.
Step 3: Select Your Board Members and Officers
The directors of a nonprofit are responsible for overseeing the operations of the organization. The directors come together to form a board.
The officers of a nonprofit (such as the president or the secretary) are individuals with responsibilities, and the authority to execute based on their job descriptions.
Together, the officers and the board will come together to make up the organizational structure of your nonprofit.
To be eligible for 501(c)(3) status, the organization structure of your Maryland nonprofit corporation MUST include:
- At least 3 directors not related to each other
- A president
- A secretary
- A treasurer
NOTE: One person may hold two or more officer positions, however, if a document requires signatures of two officers, it must be signed by two different people.
To learn more, read our guide on how to select board members for your nonprofit
Step 4: File the Maryland Articles of Incorporation Form
To become a nonprofit corporation in Maryland you must file the Articles of Incorporation with the State of Maryland.
In order to qualify for 501(c)(3) status, the organization’s purpose must explicitly be limited to one or more of the following:
- Testing for public safety
- Fostering national/international amateur sports competition
- Preventing cruelty to animals/children
You will need to mail the following to the State Department of Assessments and Taxation:
- Articles of Incorporation
- A nonrefundable filing fee of $170 payable to the State Department of Assessments and Taxation
State Department of Assessments and Taxation
301 W. Preston Street; 8th Floor
Baltimore, MD 21201-2395
To learn more, read our guide on How to File the Maryland Articles of Incorporation.
Step 5: Draft Bylaws and Conflict of Interest Policy
There are two documents that will be central to the running of your nonprofit:
Bylaws: These are the rules that determine how your organization will be governed and run.
Conflict of Interest Policy: These are the rules set to ensure that decisions being made for the nonprofit are based on what is best for the organization, and not being motivated by what is best for individuals.
Step 6: Conduct an Organizational Meeting
An organizational meeting is the first official meeting of your nonprofit! Some of the things that are discussed in a typical organizational meeting:
- Taking attendance to show you have a quorum (minimum number needed)
- Appointing temporary officers, chairmen, secretaries, etc.
- Adoption of the bylaws
- Adoption of conflict of interest policy
Don’t forget to record “minutes” of the meeting and have it signed by all attending directors. Here are some corporate minutes templates to help you get the ball rolling.
Here are some corporate minutes templates to help you get the ball rolling.
Step 7: Get an EIN
An EIN or Employment Identification Number (also called a Federal Tax Identification Number or Federal Employment Identification Number), is used to uniquely identify a business entity. You can think of the EIN as a social security number for your nonprofit.
The EIN is required for your organization whether or not it will have any employees.
To learn more, read our guide on how to get your EIN.
Step 8: Applying for Exemption from State and Federal Taxes (501(c)(3) status)
Applying for Exemption from Federal Taxes:
A nonprofit may be eligible for 501(c)(3) status only if its purpose is limited to one or more of the following:
Charitable, Religious, Scientific, Educational, Literary, Fostering national/international amateur sports competition, Preventing cruelty to animals/children, Testing for public safety
Before a nonprofit can apply for 501(c)(3) status it must:
- Elect at least 3 directors not related to each other
- Register as a nonprofit with the state
- Adopt the bylaws and conflict of interest policy
- Have an EIN number
Once these four conditions have been met your nonprofit can apply for 501(c)(3) tax-exempt status by filing Form-1023 online.
If your application is approved, the IRS will send you a determination letter stating that your organization is exempt from federal taxes under section 501(c)(3).
To learn more, read our guide on How to File Form 1023-EZ.
Applying for Exemption from State Taxes:
For exemption from state income tax send the following:
- A letter requesting exemption from Maryland Income tax
- Copy of the IRS determination letter
- Copy of the bylaws
- An explanation of the purpose of your organization
- Latest financial statement of your nonprofit.
Comptroller of the Treasury
Revenue Administration Division
110 Carroll Street
Annapolis, MD 21411
Information: (410) 260-7980
Web Site: www.marylandtaxes.com/
Filing Fee: $0
For exemption from sales and use tax, you must submit a Sales and Use tax exemption certificate application.
Once you have formed your Maryland nonprofit, we recommend you read our guide on How To Protect your Maryland Nonprofit and Keep It Compliant.
Step 9: Open a Nonprofit Bank Account
After you acquire an EIN and a federal tax exemption for your nonprofit, you can open a 501(c)(3) bank account to begin soliciting donations or paying vendors and employees of the organization.
Opening a bank account for your nonprofit is the first step towards creating a paper trail of all income and expenses to show the IRS that your nonprofit is legitimate, honest, and legal.
There are several rules and exceptions that differentiate a 501(c)(3) bank account from a traditional business account. To find the best bank for your organization's financial needs read our review of the best banks for small business.
Step 10: Get Insurance for your Nonprofit
A nonprofit has assets and can be the subject of legal action or suffer financial damages from accidents, just like a regular business.
We recommend Commercial Insurance to protect your organization from lawsuits and damages.