A man, his head partially in frame, sits at a desk and fills out a form. A woman sits next to him and in front of a laptop, watching him with a smile.
Registering your nonprofit is the first step on your new organization's journey, and it's a very important step that shouldn't be overlooked. — Getty Images/fizkes

If you’re thinking about starting a nonprofit, registering your organization is one of the most important steps. Nonprofits registered as 501(c)(3) organizations are exempt from paying federal or state income taxes. Here are six steps you can take to register a nonprofit.

[Read more: How to Start a Nonprofit]

Name your organization

The first step is to choose a non-trademarked name for your organization. This isn’t a decision you want to rush into—your nonprofit’s name should tell others about your mission and impact.

The name can help you bring in new supporters and grow your community and a name is necessary to register the nonprofit and apply for tax-exempt status. Plus, changing your name down the road can be a hassle.

Once you’ve chosen a name that represents your organization, you need to make sure it’s available. Check with the Secretary of State and the U.S. Department of Commerce to ensure the name hasn’t already been trademarked.

Select a board of directors

Your board of directors is responsible for overseeing the organization and making policy and financial decisions. Depending on what state you live in, you may be required to select the board of directors before registering your nonprofit.

For your initial board members, look for individuals who believe in the mission of your nonprofit. They should also have a certain level of business experience to contribute.

It’s a good idea to look for individuals that have some experience serving on a board of directors. In particular, they need to understand that the board provides governance but doesn’t manage the nonprofit.

[Read more: How to Join the Board of a Nonprofit]

Apply for an EIN

Even if you don’t have any employees, you need to apply for an Employer Identification Number (EIN). The IRS uses this nine-digit number to track your organization’s activity.

It’s also a requirement to open a business bank account and to file for 501(c)(3) registered status. You can apply for a free nonprofit EIN on the IRS’s website.

For your initial board members, look for individuals who believe in the mission of your nonprofit.

File the articles of incorporation

The articles of incorporation make up the primary document that forms a corporation for your nonprofit. This document is not difficult to fill out and should include the following information:

  • The name of your nonprofit.
  • Your nonprofit’s office address.
  • The registered agent.
  • Your board of directors.
  • The nonprofit’s purpose.

For nonprofits, the articles of incorporation should also include certain language to ensure you’ll qualify for tax exemption. And some states require you to publish a notice in your local newspaper.

[Read more: Choosing the Right Nonprofit Type: Which Is Right For Your Business?]

Write the bylaws

The bylaws are the rules and procedures for your nonprofit. Even if your state doesn’t require you to have bylaws, it’s a good idea to write them anyway. Well-written bylaws can help you resolve disputes and demonstrate that your organization is managed responsibly.

Here is the information you’ll need to include:

  • The name of your nonprofit.
  • The nonprofit’s purpose.
  • A list of officers.
  • The procedures for adding and removing board members.
  • Term limits for board members.
  • The end of your fiscal year.

You’ll also want to include any other details that are specific to your organization. For instance, you may want to address how you’ll handle a conflict of interest or outline the compensation policies for board members.

File for tax-exempt status

Once you’ve completed the previous five steps, it’s time to apply for 501(c)(3) tax-exempt status. Most nonprofits will only do this at the federal level, but some states require that you file at the state level too. You should contact your state tax agency to find out what steps you need to take.

You’ll start by filing Form 1023 with the IRS. If your nonprofit has less than $250,000 in assets and less than $50,000 in gross receipts, you can file page three of the 1023-EZ application.

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Published November 30, 2021