A non-profit business entity (NPO) is an organization from which owners or shareholders do not receive a distribution of surplus funds. Instead, the NPO appropriates the funds to further its business goals. NPOs can include charities, public arts companies, trade unions, and government agencies. Non-profit incorporation is similar to starting a regular corporation. However, a non-profit corporation must take extra steps to apply for a tax-exempt status with the IRS, as well as within the applicable state in which it plans to do business.
Instructions
1. Decide upon a business name that is still legally available in your state. The secretary of state or The National Association of State Charity Officials (NASCO) usually has information on find a business name. File your "articles of incorporation" and pay the required filing fee, according to state requirements. Contact your state or visit their website for exact information. Apply for state and federal tax exemptions.
2. Devise bylaws in order to establish how the corporation will be run. Decide upon and appoint a board of directors. Hold a meeting to go over the existing paperwork and bylaws.
3. Apply for the necessary licenses or permits that are required so that your corporation can operate legally in your state. Once the paperwork is filed, including a copy of the articles of incorporation, an application may be submitted to the IRS for federal non-profit status as a 501(c)(3) organization.
4. Complete the following forms for the IRS: IRS Package 1023, Application for Recognition of Exemption; and IRS Form 818, User Fee for Exempt Organization Determination Letter Request. The forms are available by calling 800-TAX-Form, or via download from the IRS website. Check to see if the city where you will incorporate requires a solicitation license in order to solicit funds. If so, apply for one.
