In this week's Freedom Friday blog and email newsletter, I want to talk about a topic that I get asked about a lot, and usually once or twice a year, somebody, or some group of people want my assistance in forming a nonprofit.  Given that this is the season for giving, in today's Freedom Friday blog and email newsletter, I'm talking about how to start a nonprofit in 2024.

First of all, if you want to start a nonprofit in Oklahoma, you can't just do it by yourself, on your own.  Oklahoma law requires you to have at least three (3) “incorporators” to start a nonprofit and serve as an initial board of directors.  If you have at least (3) people to start your nonprofit, here are five (5) steps to starting your nonprofit in Oklahoma:

1.  Define Your Purpose

The first step in starting your nonprofit is to define your purpose.  This is because you need to be able to articulate a charitable purpose to the Internal Revenue Service (IRS) in order to qualify for 501(c)(3) status.  It's important to hire an attorney to assist you with this first step because the charitable purpose statement must be included with your Certificate of Incorporation and/or your bylaws, both of which must be submitted with your application for 501(c)(3) status with the IRS.

2.    Choose Your Non-Profit's Name

The second step in starting your nonprofit is to choose your nonprofit's name.  This is also an important step because you can't choose a name being used by another nonprofit, or even a name being used by some other for-profit business.  There are many options here, but it's always best to consult with an attorney who can guide you through this part of the process and conduct a name search with the Oklahoma Secretary of State.  You might also consider a name which can be easily trademarked, so you might wish to ask your attorney to do a trademark search, as well.

3.    Choose Your Non-Profit's Business Entity

The third step in starting your nonprofit is to choose a business entity for your nonprofit.  Now this might seem obvious, but believe it or not, some people think an LLC can be classified as a nonprofit, and that's not true.  Also, some people think that a “501(c)(3)” is a business entity, and that's not true, either.  “501(c)(3)” is not a business entity, but it is only a tax-designation with the IRS.  In Oklahoma, if you want to form a nonprofit, you must form a “nonstock corporation”.  Again, the Oklahoma Secretary of State will require you to list three (3) “incorporators” when you form the nonprofit or nonstock corporation as part of your application.

4.    Draft Your Non-Profit's Bylaws

The fourth step in starting your nonprofit is to draft your nonprofit's bylaws.  Your bylaws should be drafted by an attorney, and then signed by your initial board of directors.  Not only should your bylaws include your purpose statement, but they also need to define the responsibilities of your board of directors, and the roles of each officer on the board.

5.    Maintain Business Formalities

The fifth step in starting your nonprofit is to maintain business formalities.  This is important because it is critical to separate the assets of your nonprofit from your own personal assets, from the personal assets of your other incorporators or board members, and from the assets of any for-profit business you might also be involved in.  You also need to obtain an EIN number from the IRS for the nonprofit, and the nonprofit needs to have its own bank account, too.  Its also important to document everything, especially the minutes of each board meeting.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/