Written by; Rena McDonald
Creating a non-profit can be a great way to give back to your community while working on something that also has meaning for you. There has a been a significant increase in nonprofit filings in states all over the country in the last 10 years. Although your mission is to help those in need you are still required to function within the legal structure of a business to make sure you don't run afoul of non-profit regulations. Even with the best of intentions, if you do not complete the required documentation to property register your non-profit. you may face heavy fines and be completely barred from ever registering a non-profit in the future.
Step 1- Create a mission and Name
What is your non-profit company going to do? What are you going to call it? Creating a plan before you begin can help you identify where you may run into potential issues later on.
Step 2- Incorporate
This is very similar to filing an LLC or Corporation in the state on Nevada. You have to comply with the specific guidelines of the Secretary of State which include identifying responsible parties, registering your non-profit name and notifying the SOS of your intent to obtain tax-exempt status. You also will need to create the Bylaws by which your company will operate and determine whether you will have partners, investors, or directors.
Step 3- Talk to an experienced CPA regarding your non-profit.
The forms required by the IRS to obtain tax exempt status require that you disclose current and future financial information. This information can often be difficult to project and misstating this information could cause you to pay in the future or could cause a complete denial of your application. We always suggest speaking with someone who has experience with non-profits before completing your application with the IRS.
Step 4- Apply for Non-Profit status
Applying for non-profit tax exemption status with the IRS can be the most difficult part of the process. The requirements for tax exemptions are specific and must be strictly adhered to or the request will be denied.
Step 5- Obtain any necessary licenses and permits
The state/city in which your non-profit will operate will require specific license in order for your non- profit to operate, even if you work from your home. Compliance with these regulations will protect your non-profit status and corporation from fines and litigation.
Starting a non-profit may be your ticket to creating lasting employment that is both satisfying and rewarding. These steps will help you create the non- profit you have been dreaming about. If you have questions about creating a non-profit, please contact McDonald Law Group for a consultation.
This article is provided for informational purposes only. It is not legal advice or constitute an attorney-client relationship.