New nonprofits must file several documents with their state and federal governments. Many nonprofits, but not all, are 501c3 organizations and must apply for tax-exempt status with the Internal Revenue Service (IRS). However, all nonprofits must file their article of incorporation with their state regardless of their tax status.
Each state has different rules, so we’ve provided a list of what you must include and how to ensure you don’t miss any required items. We’ve also included an article of incorporation sample to help you get started.
- What are articles of incorporation?
- What must you include within nonprofit articles of incorporation?
- 6 Helpful tips to file flawless articles of incorporation
- Free sample of articles of incorporation
- Frequently asked questions (FAQs)
What are Articles of Incorporation?
Nonprofits need to submit the articles of incorporation to the government to legally form the organization. The whole process of drafting the papers, submitting them, and having them approved by the state is called incorporation.
Some may be surprised about the need to file articles of incorporation since nonprofits do not think of themselves as corporations but starting a new nonprofit means you’re now a business.
Nonprofits must file their articles of incorporation with their Secretary of State, follow all requirements on the website, and become officially incorporated. Nonprofits looking to gain 501c3 status from the IRS must file their articles of incorporation first to prove nonprofit status.
Along with your articles of incorporation, you will also pay a filing fee, which is different for each state. It ranges from $100 to $250.
What Must You Include within Nonprofit Articles of Incorporation?
Nonprofit articles of Incorporation include vital organizational and contact information.
1. Organization’s name
Different states have various requirements for corporation names. In many cases, your nonprofit must include the abbreviations for Inc. or Corp.
The primary rule when choosing a name, regardless of the state, is that you cannot have the same or similar name as another organization.
2. Address for primary office
If your nonprofit has a location, this is easy to include. If not, you’ll want to use the name and address of your organization’s registered agent.
New nonprofits must appoint a registered agent to receive all legal documents of their organization. This agent can be an individual or a business. All nonprofits must include the name and contact information of their registered agent in the articles of incorporation.
3. Nonprofit’s purpose
Your nonprofit’s purpose is the primary reason for your existence. You will be asked to state your purpose on many official and unofficial documents. Your state may have specific rules on how to communicate your purpose. Sometimes, you may also need to include your North American Industry Classification System (NAICS) code.
If your nonprofit plans to apply for 501c3 charity status with the IRS, you must use the same purpose on both documents, so be extremely careful when stating your purpose on the articles of incorporation.
4. Duration of organization
Most nonprofits do not have an end date in mind for their organization. In this case, nonprofits generally state the duration as permanent or perpetual.
5. Contact details of Incorporators
Your nonprofit’s incorporators are those individuals in charge of filing your articles of incorporation. You can have more than one incorporator.
6. Contact details of board members
New nonprofits must develop a Board of Directors to ensure that all government regulations are followed and that the organization has a strong leadership committee.
It’s best to create your board before filing your articles of incorporation. This way, you can include all board members’ names, titles, and contact information on the official documents.
7. Additional statements
Each state has different regulations, but if your organization plans to file for 501c3 status with the IRS, you must include a few statements in your articles of incorporation. These include:
7.1 Exemption requirements
Exemption requirements state that the nonprofit will not financially benefit its members, officers, or other individuals. Nonprofits must also state that they will not carry out activities outside of IRS rules for 501c3 organizations.
7.2 Dissolution clause
The IRS requires nonprofits to have a dissolution clause in case their nonprofit is dissolved. The IRS has included specific language needed for this clause.
7.3 Personal liability
While not required, your nonprofit may also want to include a statement that addresses the personal liability of your organization’s senior staff and board members.
6 Helpful Tips to File Flawless Articles of Incorporation
It’s easy to feel overwhelmed when starting a nonprofit. Filing your articles of incorporation is required, but there are ways to ensure you don’t miss essential details. The following tips can help you with any questions you may have.
1. Check your state’s website
Every state has its own rules when filling out articles of incorporation. Before doing anything, nonprofits must search their Secretary of State’s website for these rules and requirements.
Some states have a specific form to file online. Others are more relaxed. Some states even require you to put a notice in your local newspaper about your nonprofit or file an initial business report. This is why it’s vital to visit your state’s website.
2. Check the IRS website
When filing your articles of incorporation, remember to visit the IRS website. Since states are so varied in requirements, you must do your due diligence to ensure you’ve included all required documents for a 501c3 organization.
3. Search for available names
The primary reason to file articles of incorporation is to legalize your nonprofit’s name. Your nonprofit name cannot be the same as other organizations. Most state websites allow you to enter your desired company name to ensure availability.
4. Hold a board meeting beforehand
Your nonprofit must include names and contact information for all board members when filing your Articles of Incorporation. It is best to have all this finalized and approved through a meeting before entering it into a legal document.
If your nonprofit undergoes structural changes after filing your articles of incorporation, you must amend your articles of incorporation and update changes to your board, registered agent, and others. Before including these details, ensure 2/3 of your board votes to approve these changes.
6. Be careful of the language
Remember, you must ensure both your article of incorporation and IRS Form 1023 use the same language. Review these documents to check the wording. This is especially important to avoid the rejection of your articles.
Free Sample of Articles of Incorporation
If your Secretary of State website does not have a form to file, and you are unsure what to file, we’ve included a free Article of Incorporation sample to help you get started.
Click to download for free.
Since most nonprofits don’t see themselves as a corporation, it may surprise leaders that they must file articles of incorporation. Still, the minute you start a nonprofit, you are a business, and filing articles of incorporation with your state is only the first step.
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Frequently Asked Questions (FAQs)
1. Why do nonprofits need articles of incorporation?
There are several reasons to file your articles of incorporation, including –
- Authorizing your nonprofit’s name.
- Limiting personal liability of board members and members.
- Applying for 501c3 federal tax exemption with the IRS.
2. Where do you file articles of incorporation?
All nonprofits must file articles of incorporation with their state on your Secretary of State’s website.
3. Are bylaws and articles of incorporation the same?
Your nonprofit’s bylaws are your organization’s operating manual. You must include your organization’s name and purpose in the bylaws as well as in the articles of incorporation, but there are many other ways they differ.
The following things must be included in your organization’s bylaws but not the Articles of Incorporation.
- Board member titles, terms, and election rules.
- Membership details.
- Board meeting guidelines.
- Compensation and Indemnification for board members.
- Executive Director role details.
- Conflict of Interest policy.
- Amendment of bylaws.
Disclaimer: By sharing this information we do not intend to provide legal, tax, or accounting advice, or to address specific situations. The above article is intended to provide generalized financial and legal information designed to educate a broad segment of the public. Please consult with your legal or tax advisor to supplement and verify what you learn here.