Classifying as a nonprofit organization has always been a popular choice for Nevada business owners when deciding on the classification of their new business entity. Not all businesses can be classified as a nonprofit or 501(c)(3), however. To qualify for 501(c)(3) status, an entity must be formed for charitable, educational, literary, religious, or scientific purposes. A 501(c)(3), as many people know, is eligible for federal and state tax exemptions – and thus drives the popularity of the classification. In this blog, we will go over things to keep in mind if you’re thinking of forming a nonprofit organization.
Let’s go over what business organizations will qualify for a 501(c)(3). The business entity must be organized as a corporation, or unincorporated association, or trust. Your will not qualify if you are a sole proprietorship, limited liability company, or partnership. Assuming you decide to proceed as a corporation, you’ll need at least one director for the nonprofit organization to file your nonprofit’s articles of incorporation. The Nonprofit Corporation Packet can be found here at the Secretary of State’s website. All officers, directors, and registered agent must be listed under Nevada state law within a month of filing the entity’s articles of incorporation. The articles of incorporation are then renewed annually thereafter. Contact us for more information on registered agent services.
You will also need to draft your nonprofit corporation’s bylaws. This document must comply with Nevada law and will contain the rules and procedures your organization will follow for electing officers and directors, meetings, and other corporate procedures required in Nevada. Once you have your bylaws, you’ll want to hold a meeting with the board of directors to go over the organization’s details in its entirety. Be sure to keep minutes that accurately record your board’s actions. Contact us for more information on corporate bylaws.
Now that you have created your nonprofit and have the details of the nonprofit ironed out, you can now begin applying for your federal tax exemption. Complete and file a Form 1023 to the IRS. This is a long and detailed form that asks for a lot of information about your nonprofit. Once submitted it can take up to six months to find out if your application was accepted and your business was granted a tax exemption. Smaller nonprofits can file a Form 1023-EZ which is much shorter, simpler, faster, and can be filed online. The organizations with annual gross receipts of less than $50,000 and assets of less than $250,000 are eligible to use the EZ form. For more information on forming a Nevada nonprofit, consult a Nevada business lawyer.