Nonprofit Help Guides

Are voting members required?
In short, no. The main function of voting members is to elect the board of directors. In fact, most companies choose not to use voting members at all, instead opting to only use a board of directors, which is elected at the first corporate meeting. These boards are self-perpetuating in that they elect their own replacement members and additional mem...
When can nonprofits start soliciting donations?
Nonprofits in all but 10 states are required to register with the appropriate state division prior to soliciting donations in that state. The states that do not require registration as of 2016 are Delaware, Idaho, Indiana, Iowa, Montana, Nebraska, South Dakota, Texas (except for certain law enforcement, public safety, and veteran causes), Vermont, a...
How do nonprofits gain tax-exempt status?
To qualify under section 501(c)(3) of the IRC, nonprofits must file Form 1023 with the IRS within 27 months of having their articles of incorporation approved by the state. However, after the articles of incorporation are approved, but before filing Form 1023, it is necessary to take care of a few other preliminary matters. For instance, you may nee...
How does a corporation protect my personal assets?
A corporation is considered to have separate “legal personality” from the people that own it—the shareholders. This means that a corporation has the ability to enter into and enforce contracts. Additionally, a corporation can also accrue debt and own assets. As a separate legal entity, if any creditors attempt to enforce a debt against a corporation...
In which state should I incorporate?
When deciding in which state to incorporate, it is necessary to consider many different factors. The ultimate choice will depend on the particulars of your business’s situation and needs. First, you will need to become familiar with the relevant business laws in the state where your business is physically located. Incorporating in your home state ma...
How do I choose a name for my business?
When completing your articles of incorporation you will need to indicate a unique name for your business. The name should not lead consumers to confuse your business with another business already in existence, especially if that business operates in the same region or industry in which you plan to conduct business. Best practice is to shortlist your...
How long does the incorporation process take?
The length of the incorporation process varies widely depending on the state in which you choose to incorporate. In most states, the average turnaround time is roughly 10 days; however, it may take up to three or four weeks in some states. For this reason, many nonprofits choose to use expedited filing in order to start operating more quickly. With...
What do nonprofits need to file annually or quarterly?
Nearly all nonprofits are required to file Form 990 annually with the IRS. Those that have income below certain thresholds may be eligible for filing more condensed versions of this form. Nonprofits may also be required to file a number of annual reports with the state governments where they operate, possibly including financial reports, fundraising...
Does a nonprofit need corporate bylaws?
Federal tax law does not require nonprofits to maintain corporate bylaws or to include any specific language. However, most states require nonprofits to maintain updated bylaws, and it is generally advisable to do so even if not mandated by state law....
How do I create and file the articles of incorporation?
States routinely accept articles of incorporation wholly created by the nonprofit’s initial members. However, if the articles are not completed correctly, the nonprofit may face denial of tax-exempt status when it applies with the IRS. For this reason, nonprofits often choose to use an online service or a business attorney well versed in handling in...