Planning To Start A Non-Profit Incorporation? Here’s Your Legal Checklist

There is an array of legal formalities that one has to fulfill in order to start a non-profit incorporation. Though the exact procedure and requirements may vary depending upon the location of your business and the specific type of business you are in, the basics remain the same. Following is the legal checklist applicable in this regard.

Choose A Suitable Name For Your Business

The first step is obviously to choose a name for your business. While you do the brainstorming, it is very important for you to keep in mind that depending upon the state your business is located in, you may be required to include an identifying word with the name of your business. Those identifying words may include “corporation”, “limited”, “incorporated”, or Slang abbreviations of these terms.

Make Sure The Name You Have Chosen Is Available

You cannot start a non-profit incorporation with the same name of an existing business. Besides that, you cannot use words that are trademarked. In fact, it is always wise to choose a name that is not even similar to any other existing business name. Before you proceed, you must search for the availability of your proposed business name.

Get That Name Registered

Once you finalize a name and are sure that it is available, the next step is to get that name registered with your state. The registration process varies from one state to another. You can contact your state authority for more details.

Where To Incorporate?

After you are through with the registration process of your business name, you will have to decide the location where you want to start a non-profit incorporation. This is a big decision, as location plays a key role in the success of a business. Over the years, I’ve met many entrepreneurs who regret not understanding the key differences between a sole trader and a limited company. This comprehensive guide on the difference between a sole trader and limited company set up is a must-read. The choice you make can impact your financial and legal responsibilities. It’s always better to be informed than regretful.

Finalize Your Corporate Structure

The next thing you have to is to finalize a corporate structure for your non-profit corporation. Make a detailed list of all those people who are going to be the directors of your corporation.

Articles Of Incorporation

As per the business laws in the United States of America, you are also required to create and sign the “Articles of Incorporation” of your corporation.

Filing Articles Of Incorporation

Once you create and sign your corporation’s Articles of Incorporation, you must file it with the “Secretary Of State” in your state. As part of the process, you will be asked to pay a certain amount of money as processing fee and other legal charges.

Write Corporate By-Laws

When you start a non-profit incorporation, you will also need to write the by-laws of your corporation.

Follow The Procedure To Become A Tax-Exempt Organization

Since you are starting a non-profit organization, you will obviously like to obtain the tax-exempt status not only from your state but also from the federal government. For this, there is again a set procedure that varies from one state to another. Basically, you need to submit an application with the state authority and then follow the instructions.

Last, but not the least, when you start a non-profit incorporation, you also need to obtain necessary permits and licenses from your local government, state government, and also from the federal government.