Being such a vital step for every nonprofit, it’s crucial to understand how set up a 501(c)3 and register your organization for three primary reasons: protection for members, directors and other individuals, proper tax filing and security, and the ability to begin legal fundraising. All of this is essential for a nonprofit to function properly and meet guidelines set forth by state law. We’ll walk you through the process below, but it’s always good to keep in mind that a qualified nonprofit attorney will be able to assist you in registering a 501(c)3.
The most important part of obtaining 501(c)3 status rests on filing proper forms with the IRS. Form 1023 is a 28-page document that includes other attachments and supporting documentation as necessary. This form is how the IRS determines if the organization meets 501(c)3 requirements to be classified as a non-profit regarding tax laws.
The organization must clearly outline the intent and purpose of the group as well as planned activities. The IRS is mostly making sure that there’s no personal gain for members and that the group is fully focused on bettering a cause rather than an individual member.
Status is not entirely obtained until other state guidelines are met. This varies slightly state-to-state, but most states allow a state sales tax and state corporate tax exemption. However, states like California require its own application and review process. Be sure to check with your state laws before beginning any paperwork. You could save yourself some considerable time and resources.
Once you’ve properly registered your non-profit and obtained 501(c)3 status, then you are finally ready to start your fundraising efforts. Organizing your non-profit will ensure that you are working within the confines of the state guidelines and tax law. Failure to do so could lead to fines or even a total dismantling of the entire organization.
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If you have other questions or concerns about your organization, LawTrades can help you find the best non-profit lawyers to help you grow. Having a professional on your side will help streamline registration and status, saving you considerable time and money. Because non-profits usually require ongoing services, you may be interested in LawTrades subscription-based legal plans. This option allows for on-demand legal consultations, $0 service fee, and discounted hourly rates. Plus, we offer a few additional project management and business perks that could be advantageous for non-profits. Contact us today to set up an initial consultation.