Nonprofits

The LawGives Nonprofit Guide provides the 7 step process for creating your 501(c)(3), which can be legally formed as a public charity, a private foundation, or a private operating foundation.


Nonprofits: an overview


Creating your public charity, private foundation, or private operating foundation

Follow the steps below to create your public charity, private foundation, or private operating foundation.

  1. Choose a Name. The name of your nonprofit cannot be the same name as another corporation on file with your State’s corporations office. For a small fee, you can usually reserve your name for a brief period of time until you officially file your articles of incorporation.
  2. File Articles of Incorporation. The Articles of Incorporation are the charter of your organization. The document lists basic information such as your organization’s name, address, purpose, and who the incorporators are. The Articles of Incorporation protect both the board and staff from legal liabilities incurred by the organization. This is because the corporation is the owner of debts and liabilities, not the board or staff.
  3. Apply for Your IRS Tax Exemption. Submit a federal 501(c)(3) tax exemption application to the IRS.
  4. Apply for State Tax Exemption. Some states require a separate application, however many states will automatically grant you state tax exemption upon approval of your federal 501(c)(3) status.
  5. Draft Your Organization’s Bylaws. Bylaws are the set of rules that dictate the internal governing rules and procedures that the organization will follow for holding meetings, voting on issues, and electing directors and officers. The bylaws are typically adopted by the company’s directors at the first board meeting.
  6. Appoint Directors. Your organization’s directors will make all of the major policy and financial decisions for the nonprofit. Some states require an organization to have a minimum of 3 directors, some states only require 1. It’s best to check your individual state’s laws.
  7. Hold a Meeting of the Board of Directors. The Board should take care of three formalities: adopting the bylaws, electing officers, and recording the receipt of federal and state tax exemptions.

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