Incorporating a nonprofit

File articles of incorporation

Nonprofit corporations are created by filing articles of incorporation (sometimes called a certificate of incorporation) with the state, usually the Secretary of State or Department of State. Filing fees and forms vary by state. Most states offer online filing.

Typical requirements include the corporation's name, a registered agent and office address in the state, the names of incorporators, and a statement of purpose.

Include the language the IRS looks for

To qualify for 501(c)(3) status, your articles must pass what the IRS calls the organizational test. In practice this means two clauses.

• A purpose clause limiting the organization to one or more exempt purposes under section 501(c)(3).
• A dissolution clause stating that on dissolution, remaining assets will be distributed for an exempt purpose.

The IRS publishes sample language in the instructions to Form 1023. If your state form does not have room for these clauses, attach them. Fixing articles after the fact means filing an amendment with the state, which costs time.

Choose a name you can keep

Check your state's business name database, search for trademarks, and check whether the matching web domain is available before you file.

State-specific steps

Some states require additional steps after filing, such as publishing a notice of incorporation, registering with the attorney general's charities office, or applying separately for state tax exemption. Your state's filing office and attorney general's website list these. A short consultation with a nonprofit attorney in your state is money well spent at this stage.

Hold an organizational meeting

Once the state approves the filing, the initial board meets to adopt bylaws, elect officers, approve a conflict of interest policy, and authorize opening a bank account and applying for an EIN. Record all of it in written minutes.