Create a non-profit organization by filing a 501(c)(3) non-profit corporation

By forming a 501(c)(3) non-profit corporation, you can start a non-profit organization.

Cost: $2599 for a single file (plus state fees)

Turnaround Time: Each state has its own turnaround time.

Additional Services

Employer Identification Number (EIN) – EIN stands for Employer Identification Number, which is also known as a Tax Identification Number. After you’ve submitted your Articles of Incorporation, now is the time to submit your 501(c)(3) application, which is a crucial next step in forming a non-profit. This IRS application is required to get tax-exempt status for your organization, which allows donors to make tax-deductible contributions to your non-profit.

Corporate Kit –Bylaws, meeting minutes, 20 membership certificates, and more are all kept in a custom binder.

Registered Agent –Service of Process and sending of tax notices

Good Standing Certificates –This is beneficial for loans or applications to other states.

Annual Reports – The initial statement must be submitted within 60 days of establishment in most states.

The Advantages of Non-Profit Organizations:

• Income is not subject to federal income tax. 
• Contributions are tax-deductible. 
• Eligibility for private and governmental grants 
• Postage prices for corporate mailings are reduced. 
• Rates for local radio announcements have been reduced. 
• Credibility in the non-profit sector

Frequently Asked Questions for Non-profit Corporations

How can I start a non-profit organization?

The information and paperwork required to submit Articles of Incorporation or a Certificate of Incorporation vary depending on the state and kind of business. All you have to do to incorporate with Biz Pro Filings is fill out our online purchase form or phone us, and we’ll design and file your Articles of Corporation. In addition, you must pay any required initial franchise taxes or other expenditures, as well as filing fees.

What is a 501(c)(3) public charity?

A 501(c)(3) public charity is one that was established under state law, operates for a 501(c)(3) purpose, serves an unidentified charitable class of people, engages in non-political activities, and gets at least one-third of its money from the general public. Educational, religious, scientific, medical, and philanthropic efforts are all possible goals for a 501(c)(3) organization.

Is forming a 501(c)(3) public charity, private foundation, or other tax-exempt organization difficult??

This is NOT the case here. The majority of people who start non-profit organizations want to do it as a 501(c)(3) public charity since public donations are significantly more plentiful. A 501(c)(3) “public charity” allows private contributors to give up to 50% of their adjusted gross income. A “private foundation” can only accept donations of up to 30% of its donors’ adjusted gross income. 

To decide whether an organization is a public charity or a private foundation, the IRS will look at its principal source of financial assistance. In general, the IRS will designate an organization as a private foundation if it receives its funding from a small number of people.

The IRS will normally categorize a foundation as a public charity if the organization’s funding sources are significant and diverse enough.

Do I need an attorney to incorporate?

The answer is no. You may create and submit the Articles of Corporation on your own, but you should familiarize yourself with the requirements of the state in which you wish to incorporate. Consult an attorney or accountant if you are unclear whether or not creating a legal entity would benefit your firm or which business type to form.

Is my non-profit organization tax-exempt once I file my articles of incorporation??

No this is not the case. Although your state grants non-profit status, the IRS grants tax-exempt status at the federal level. To be awarded tax exempt status, you must submit a separate IRS application.

How many board members and directors does my non-profit organization need?

Traditionally, the board members of your non-profit are its founders and/or those who supervise its operations. For incorporation purposes, one individual may act as the only director in most states. The IRS nearly usually needs at least three separate persons to serve on the board of directors when filing a 501(c)(3) application or other sorts of tax exempt application. 

Volunteer directors are preferred by the IRS in general. Don’t worry if you just have one director at first. Later on, you’ll be able to add more directors.

Three directors, who are not connected by birth or marriage, are necessary. Keep in mind that cops may be rewarded “fairly.” For example, if a nonprofit gets $100,000 in its first year and pays a $50,000 compensation to an executive, the IRS is likely to deem this an “unreasonable” figure. A non-profit corporation must also record its payroll in the same way that any other business does. Officers are elected by the board of directors to handle the day-to-day operations. The IRS, on the other hand, prefers that you name at least three officials. It is, however, absolutely permissible to elect corporate executives who also serve on your board of directors. There can be a director/president, a director/vice president, and a director/treasurer, for example.

Is it necessary to have a mission statement and an operational budget??

No, although having a mission statement may be beneficial to your internal operations. You must, however, have an operational budget. This is mandatory, and the IRS will evaluate it beforehand. When seeking for 501(c)(3) exemption, each organization must present a budget. A description of the organization’s revenue and spending, as well as a balance sheet for the first three years of operation, must be included in this budget.

How much does it cost to submit my tax exempt status application to the IRS?

To examine and approve your application, the IRS charges a one-time fee. The filing fee is calculated depending on your anticipated budget. The filing price is $300 if your non-profit expects yearly earnings of $10,000 or less in its first three years. The filing cost will be $750 for businesses with annual revenues exceeding $10,000.

How long will the IRS take to respond to my tax exempt status application?

It takes 3-6 months for the IRS to respond to a 501(c)3 application. While there is a limited amount of expedited service available, it is not guaranteed.

Does the IRS require salary information for tax exempt status applications?

Absolutely. The Internal Revenue Service (IRS) wants to know what proportion of the total budget is spent on salaries. If wages are excessively high, the IRS may conclude that the non-profit is benefitting the compensated directors rather than the non-programs. profit’s 

The IRS also wants to know how much each board member is paid. The amount these directors are paid must be justified in non-profit applications. If the sum is too high, the IRS will almost certainly ask you to justify the compensation or amend the figures downward.

People who are compensated by a non-profit organization are sometimes referred to as “interested.” To put it another way, it is in their best interests to approve wage increases for themselves, particularly if they are directors. If a majority of the board members are paid, the IRS sees a risk of compensation increases spiraling out of control.

Can I still be a non-profit if I don’t apply for tax exempt status?

Yes, once registered with the state, you are a non-profit corporation. Your corporation, however, will still be subject to income taxes. Donations to your non-profit will not be tax deductible if you do not have tax exempt status. Furthermore, if you are not a 501(c)(3) nonprofit, it may be difficult to acquire funds.

Can I start a non-profit for the benefit of one person?

No, non-profits must serve the public good. Seek the guidance of an attorney to establish a trust in order to form a legal entity to assist one individual.