Nonprofit Corporation Formation Service

What is a nonprofit corporation?

A nonprofit corporation (also called nonprofit, non-profit, NPO or not-for-profit) is an entity formed for purposes other than making a profit. Nonprofits are formed pursuant to different state laws than standard for-profit corporations, but the process of forming a nonprofit is very similar.

Like standard for-profit corporations, nonprofits provide limited liability protection. The personal assets of the directors, members and officers typically cannot be used to satisfy the debts and liabilities of the nonprofit.

How does my nonprofit gain “tax exempt” status?

To be considered tax-exempt, nonprofits must apply for federal and state (if applicable) tax-exempt status. Tax-exempt status is not automatically granted once the nonprofit is formed. To apply for federal tax-exempt status, Form 1023 must be filed with the Internal Revenue Service (IRS). For state requirements, it is best to contact the department responsible for taxation in the state of formation.

Please note: BizFilings does not assist with the preparation and filing of Form 1023. Our recommended resource is The Foundation Group.

What paperwork is required to form a nonprofit?

Nonprofit Articles of Incorporation conforming to state law must be prepared and filed with the proper state authorities, and filing fees and any applicable initial franchise taxes or other initial fees must be paid.

Do I need an attorney to form a nonprofit?

No, an attorney is not a legal requirement to form a nonprofit. You can prepare and file the Articles of Incorporation yourself; however, you should understand the requirements of your intended state of incorporation.

You can use BizFilings' service to incorporate and save money on attorney fees. However, if you are unsure if incorporation will benefit your organization, consult an attorney or accountant.

What steps need to be taken to form a nonprofit?

The first step is to file nonprofit Articles of Incorporation with the proper state agency. It is important that the Articles of Incorporation contain the required clauses to ensure your nonprofit will qualify for tax-exempt status. BizFilings prepares and files nonprofit Articles of Incorporation in every state.

After the nonprofit Articles of Incorporation are filed, tax-exempt status must be applied for at the federal level and sometimes at the state level. To apply at the federal level, a timely filing of Form 1023 must be made with the IRS. To determine what form needs to be filed at the state level to obtain tax-exempt status, contact the state department responsible for taxation.

Additionally, the nonprofit must comply with corporate formalities and hold annual meetings of directors, members and officers. Bylaws must also be adopted. Documents that help you comply with these corporate formalities are contained in BizFilings' Compliance Kit & Seal.

What should I name my nonprofit?

Choose the name of your nonprofit carefully. It is very important that you project the image you want for your new nonprofit. Legally, the name must not be “deceptively similar” to any existing corporation in your state or must be “distinguishable on the record” of your state. It is possible that the name you select will not be available—that’s why we ask for a second choice on the incorporation order form.

Additionally, the name you choose must show your nonprofit is incorporated. Many states require that the nonprofit name be followed by "Corporation," "Incorporated," "Company" or an abbreviation of those terms, such as "Corp." or "Inc."

What are the IRS classifications of nonprofits?

BizFilings prepares Articles of Incorporation for nonprofits pursuant to section 501(c)(3) of the Internal Revenue Code. Nonprofits formed under 501(c)(3) must be formed for some religious, educational, charitable, scientific, literary, testing for public safety, fostering of national or international amateur sports, or prevention of cruelty to animals or children purpose. Nonprofits may also be formed for other purposes pursuant to different sections of the Internal Revenue Code. If you want BizFilings to form your nonprofit pursuant to a different provision of the Internal Revenue Code, please let us know the Internal Revenue Code section in the purpose portion of our order form.

To determine if your nonprofit needs to be formed pursuant to another provision of the Internal Revenue Code, please consult the IRS Organization Reference Chart. For specific advice, please consult an attorney or accountant.

What is the correct term for the owner(s) of a nonprofit?

Because nonprofits are formed for purposes other than making a profit, the entity is a non-stock entity. As a result, there technically are no owner(s) of a nonprofit corporation like there are for for-profit corporations.

Nonprofits are similar to for-profit corporations, in that they are overseen by a board of directors. The nonprofit directors are responsible for making the major decisions for the nonprofit, and also appointing and supervising the officers of the nonprofit. The officers are then responsible for the everyday management of the nonprofit. Nonprofits also may have members, and some states require you to indicate on the nonprofit Articles of Incorporation whether directors and/or members will be involved in the nonprofit.

How many directors are nonprofits required to have?

Most states require nonprofits to have a minimum of three directors; however, some only require one director.

Where should I form a nonprofit?

Once the decision has been made to incorporate a nonprofit, the next step is to decide where to incorporate. You are not required to form the organization in the state where it will be physically located, as it can be incorporated in any state or Washington D.C. But there are factors to consider when evaluating which state is best: the cost of incorporating in the home state versus the cost of incorporating in another state, and taxation and nonprofit laws governing the states.

If the nonprofit has few owners and will undertake most of its activities primarily within a single state, local incorporation is often preferable. The cost of local incorporation will usually be less than incorporating in another state and qualifying to do business as a foreign nonprofit in the state. (A nonprofit is considered foreign in every state other than the state of incorporation.) A foreign nonprofit that qualifies to do business in another state is subject to taxes and annual report fees from both the state of incorporation and the qualifying state. Another disadvantage of incorporating outside of your home state is the possibility of having to defend a law suit in another state. For advice regarding which state is optimal for you, consult an attorney or an accountant.

How do I get started with the incorporation process?

After deciding to form a nonprofit corporation, nonprofit Articles of Incorporation must be filed with the state government and initial fees must be paid. After your Articles of Incorporation are filed, your nonprofit must hold an organizational meeting where bylaws are adopted and the incorporation process is completed. Other business decisions made during the organizational meeting, such as the determination to open a bank account for the nonprofit should be documented. All of this information, the bylaws and the articles of incorporation should be kept in a nonprofit record book. Our Compliance Kit & Seal for nonprofits can assist you with these steps.

What is Rush Filing Service?

BizFilings' Rush Filing Service allows you to decrease the filing time frame for nonprofits to 24- to 48-hours in certain states.

Is Rush Filing Service available for every state?

No. BizFilings’ Rush Filing Service is available in the jurisdictions listed in the chart below. The turnaround time listed is the time it will take us to receive verification that your documents have been filed with the state, following the name approval or consent. The timeframe excludes weekends and holidays.

How soon will I receive my documents if I select Rush Filing Service?

The 24- or 48-hour filing time is for the formation only. It typically takes longer for the states to produce the filed documents. Once BizFilings receives your documents from the state, we will ship them to you via FedEx Overnight delivery. This means you should have your documents in hand anywhere from just a few days to one week after filing. We will also scan and make them available in our Online Status Center, providing you with access before you receive the originals.

Note: some states require your signature on the incorporation documents when someone other than BizFilings is acting as registered agent. In these cases, the filing timeframe of 24- to 48-hours begins after we have received the signed documents and received any applicable prior approvals or consent.

Why should I include Rush Filing Service with my incorporation service?

Using BizFilings' Rush Filing Service secures your name and filed date in as little as 24 hours. This service is particularly valuable when you need proof of formation to secure a contract or open a bank account.