Incorporation is typically the first formal step in creating a nonprofit organization. To incorporate your nonprofit, you will need to file articles of incorporation with the appropriate state agency.
- Having a formal structure will give credibility to your programs and services.
- The corporate structure limits the liability of the organization's officers and directors.
- If you plan to apply for 501(c)(3) tax-exempt status, the IRS requires organizing documents and governance policies that are usually associated with corporations.
Where should I incorporate?
In most cases, you’ll want to incorporate in the state where your programs or services will be conducted. While it may be tempting to incorporate in another state where fees are lower or filings are less complicated, keep in mind that you would need to register the corporation and apply for separate tax exemptions in each state in which you conduct business.
What should be included in articles of incorporation?
Articles of incorporation contain basic information on the organization such as its name, registered agent, and address of the corporation’s principal office. Most state agencies that oversee incorporation will provide templates and/or instructions.
Note, however, that not all templates contain the required elements to obtain tax-exempt status. In order to meet the organization test for 501(c)(3) status, you must include language in your articles of incorporation specifically stating that:
- The corporation’s activities will be limited to the purposes set out in section 501(c)(3) of the Internal Revenue Code.
- The organization will not engage in political or legislative activities prohibited under section 501(c)(3).
- Upon dissolution of the corporation, any remaining assets will be distributed to another nonprofit, government agency, or for another public purpose.
Where can I find sample articles of incorporation?
For links to sample articles of incorporation, see the list of web sites below. For additional samples, you could also search the Internet for the keywords “nonprofit articles of incorporation”, plus your state and type of nonprofit. For example, “articles of incorporation California youth”.
What forms do I file? How much does it cost?
You may need to file certain transmittal forms in addition to your articles of incorporation. Filings and fees may vary by state. See our Map of Nonprofit Startup Resources by State for links to the relevant agencies that regulate incorporation in each state.
What else do I need to do?
- Prior to filing your articles of incorporation, conduct a name search to ensure that your desired corporation name is available in your state. In most states, you can file a name reservation for your organization if you wish to place a hold on the name until you incorporate.
- After filing your articles, many states also require you to publish a notice of incorporation with your local newspaper.
- Draft your nonprofit’s bylaws. These will be the rules your board of directors will follow in leading the organization.
- During your initial board meeting, your directors should formally adopt the organization’s mission, articles of incorporation, and bylaws.
- Obtain a business license if necessary. Check with your city or county government to see if a business license or any additional registration is necessary before conducting programs.
To learn more about starting a nonprofit, please see our free resources:
Before You Seek a Grant: A Checklist for New Nonprofits (recorded webinar)
Webinar Series for Nonprofit Startup Organizations (recorded webinars)
- Establishing a Nonprofit Organization (text-based tutorial)
To learn more about this topic, selected resources below may also be helpful.
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