It takes a special type of person to want to change the world. Starting a nonprofit takes passion, bravery, and a great idea. If you are thinking of starting a nonprofit, you will need this and knowledge of how to create a nonprofit in your state. Ohio, like any other state, has its own rules and regulations to start a new nonprofit. We have created a step-by-step guide to help you on your journey.
- Name Your Organization
- Name Incorporators and Directors
- Appoint a Registered Agent
- File Ohio Articles of Incorporation
- File an Initial Annual Report
- Apply for an Employer Identification Number
- Hold Organization Meeting and Establish Nonprofit Bylaws
- Apply for Federal and Ohio State Tax Exemptions
- Apply for Necessary Ohio State Business Licenses
- Register for Charitable Fundraising
- Create a Nonprofit Bank Account
1. Name Your Organization
The first step in starting a nonprofit is to choose a name. This may be a difficult decision, as it can feel very personal. A great name should speak to who you are and tell your organization’s story. It should also be easy to remember.
The state of Ohio only requires that your nonprofit’s name be different from all others recorded with the Secretary of State. You can search potential names using their website here.
2. Name Incorporators and Directors
Once you have chosen a name, you can start deciding on your leadership team.
To start off, your organization will need an incorporator to sign the Articles of Incorporation for your nonprofit. You will need at least one incorporator, but you can have more than one.
As a nonprofit, your leadership team will be your Board of Directors and Officers. The state of Ohio requires that you have a minimum of three directors. These directors do not have to reside in Ohio and do not have to be members of your organization unless stated otherwise in your bylaws.
The term of each elected director and officer of an Ohio nonprofit ends when a new director is elected. The positions of President, Secretary, and Treasury are required to be filled on your board, but these do not need to be held by directors. In fact, in Ohio, two or more of these positions can be held by the same person.
Choosing your board is one of the biggest decisions you make when starting a nonprofit. Who you choose will make decisions that affect your organization for years to come, so take your time and choose the best individuals to lead your nonprofit into the future.
The Ohio Attorney General’s office offers board governance webinars to help you through this process. You can register for these webinars here.
3. Appoint a Registered Agent
Ohio requires all nonprofit organizations to have a Registered Agent. A Registered Agent can be an individual or company and be responsible for receiving all legal notifications for your nonprofit. This individual or company must have a physical address in the state of Ohio and be available during regular business hours.
4. File Ohio Articles of Incorporation
Your organization will officially become a legal corporation in Ohio once you file your Articles of Incorporation. If you are not ready to continue the process to start your organization, the state of Ohio allows you to delay your official start day for up to 90 days after filing your Articles of Incorporation.
The cost of filing your Articles of Incorporation in Ohio is $99, and you can file online, by mail, or in-person. It will take approximately three to seven days for your application to be accepted once you file online or by mail. You can expedite your filing with an additional $100 fee.
If you are in a rush to finalize this step, you can also deliver your application in person and pay a $200 fee for one-day processing or $300 for one-hour processing.
5. File an Initial Annual Report
Unlike other states, Ohio does not require nonprofits to file an initial Annual Report. Nonprofits are required to file an annual report with the Attorney General’s office on the 15th of the fifth month following their fiscal year.
6. Apply for an Employer Identification Number
Once you have filed your Articles of Incorporation with the state, you will need to apply for an Employer Identification Number (EIN) with the IRS. This number will be used for tax filing and reporting and can be applied for online, by mail, phone, or fax. Online is the easiest, and the turnaround is immediate. Otherwise, it can take four to five weeks if sent by mail and up to four days if done by fax.
If you apply online, be sure to print out and save your EIN paperwork before closing the session.
7. Hold Organization Meeting and Establish Nonprofit Bylaws
Your bylaws are a blueprint for your organization. They should be tailored to your organization’s needs and goals and define the roles of your board, members, staff, and more. Our article Nonprofit Bylaws Made Easy gives you tips and best practices for writing your own bylaws.
Your first board meeting will be the time for your board to finalize and adopt your organization’s bylaws. This is also the time to create a conflict of interest policy, elect your board directors, choose the officers, and approve resolutions for opening a bank account and any other immediate needs.
Be sure to record and safely store the minutes of this first meeting. You will need proof of this meeting and the ratification of your bylaws before seeking tax-exempt status with the IRS and the state of Ohio.
8. Apply for Federal and Ohio State Tax Exemptions
Your organization must file with the IRS for 501(c)3 tax-exempt status. As a nonprofit, you have two options to file, and they depend on the amount you expect to raise. Form 1023-EZ is for smaller organizations that do not expect to raise more than $50,000 for any of the first three years.
To find out if you can file the EZ form, visit the eligibility worksheet. The filing fee for Form 1023-EZ is $275, and you can expect to receive your letter of determination in less than one month.
If you are unable to file the EZ form, you must file Form 1023. The filing fee for Form 1023 is $600, and the turnaround for your letter of determination is three to six months.
In addition to filing with the IRS, Ohio nonprofits must register with the Ohio Department of Taxation. Ohio Business Gateway is where your nonprofit can register, file, and pay your taxes. To register, you will need to have already received an IRS determination letter.
In Ohio, most nonprofits are not required to pay the Commercial Activity Tax or state sales tax. To prove that you are exempt from the Ohio sales tax, you will need to fill out and bring STEC-B Sales and Use Tax Blanket Exemption Certificate when you purchase anything for your organization.
Any nonprofit organizations that wish to sell items in Ohio will need to collect and pay sales tax. You need a vendor license to sell items in the state. The cost of this license is $25. Vendors must have one license from the County Auditor for each location.
9. Apply for Necessary Ohio State Business Licenses
Other than a vendor license, Ohio does not require nonprofits to obtain statewide business licenses. Some counties or cities may have other rules, though, so be sure to check with your local government.
If your nonprofit expects to raise funds with Bingo, raffles, and other games of chance, your organization will want to research local, state, and federal laws for these games. You must file with Ohio’s Attorney General office for any bingo games your organization plans.
10. Register for Charitable Fundraising
As a nonprofit organization, you must register with the Ohio Attorney General’s office and file an annual report every year. There is a list of Registration Questions to help you prepare before filing online. Your organization must register before soliciting gifts.
The state of Ohio offers monthly webinars to provide information on the registration process and filing requirements.
11. Create a Nonprofit Bank Account
Before soliciting funds, your nonprofit will need to open a nonprofit bank account. You will need a copy of your Ohio Articles of Incorporation, a copy of your bylaws, and your EIN. Some banks will also require you to bring a resolution from your organization’s board authorizing your incorporator to open the account.
Ongoing Compliance Obligations for Ohio Nonprofit Organizations
Corporate Annual Report
At the end of each fiscal year, all Ohio nonprofits must file an Annual Report with the state Attorney General’s office. These reports are due at the same time as you file your 990 with the IRS.
IRS Form 990
Most nonprofit organizations are required to file a 990 with the IRS every year as well. The 990 Form lists your organization’s income and expenses, the prior year’s activities and accomplishments, any details about the structure of your organization or its operations, and information on any major donors.
Your organization will file either Form 990, 990EZ, 990-N, or 990-T, depending on the type of nonprofit. The IRS provides detailed instructions for the filing of this form on its website. It is recommended that your nonprofit find a professional accountant to file this form on your organization’s behalf.
Charitable Solicitations Renewal
Ohio nonprofits are expected to renew their charitable solicitations registration at the end of every fiscal year. Organizations that hold program services in Ohio or hold assets must register under the Charitable Trust Act. Organizations that solicit funds for charitable purposes must register under the Charitable Organization Act.
Fees for the annual renewal depend on the size of your organization’s assets or donations received during the previous fiscal year. Annual filings are due on the 15th day of the 5th month following your nonprofit’s fiscal year. If you receive an extension from the IRS, the state of Ohio will follow that extension as well.
Ohio Statement of Continued Existence
Every five years, Ohio nonprofits are required to file a Statement of Continued Existence. This report updates the state’s records regarding your organization’s name, location, and registered agent information. The filing fee for this report is $25, and you can file online or by mail.
1. How Much Does It Cost to Start an Ohio Nonprofit?
- Articles of Incorporation: $99
- you can expedite your filing with an additional fee of $100, $200, or $300
- IRS 501(c)3 tax-exempt status: $275 or $600
2. How Long Does It Take to Start a Nonprofit in Ohio?
- Articles of Incorporation: 3-7 business days
- IRS 501(c)3 – Form 1023EZ: 1 month
- IRS 501(c)3 – Form 1023: 3 – 6 months
3. Do Ohio Nonprofits Need to File for a Business License?
No business licenses are required with the state of Ohio, but licenses may be necessary for your local county or city government. A vendor license is required if you sell any products.
4. Can the Founder of an Ohio Nonprofit Receive a Salary?
Founders can work in any role within a nonprofit they have founded. In that role, they can collect a salary. The IRS prohibits individuals from benefiting as founders or board members without a pay-based position.
5. Do Ohio Nonprofits Need a Registered Agent?
Yes, nonprofits in Ohio must have a registered agent to receive legal notices for the organization. This individual or company must be located in the state and have regular business hours.