The holiday season is upon us, and many of us are in the giving spirit. If you are generous, you might choose to donate or volunteer for a non-profit charity. If you are very generous, you might even want to start a non-profit organization of your own. Earlier this year I shared a blog about non-profits, which gave an overview and outlined the basic steps to starting a non-profit organization. You can check that blog out here: http://www.libertylegalok.com/what-about-nonprofits.html
In today's Freedom Friday blog, I want to take a deeper dive into the steps to starting a non-profit organization, as this area continues to be a frequently asked topic for referrals here at Liberty Legal Solutions, LLC:
1. Define Your Purpose
I shared this in the earlier blog about non-profits, but the first step in starting a non-profit organization is to define your purpose. You need to be able to articulate a charitable purpose to the Internal Revenue Service (IRS) in order to receive 501(c)(3) status. It is important to hire an attorney who can assist you with this first step because the charitable purpose statement must be included in your Certificate of Incorporation and/or your non-profit's bylaws, both of which are submitted with your 501(c)(3) application to the IRS.
2. Choose a Name for the Non-Profit
The second step in starting a non-profit organization is choosing the name for the non-profit. This is an important step, too, because you cannot choose a name taken by another non-profit. There are a lot of options here, but it is best to consult with an attorney who can conduct a name search to make sure you are not using a name already in use by another non-profit, or even another business entity. You might also consider choosing a name which can be trademarked, and so you might ask your attorney to perform a trademark search on your behalf, as well.
3. Determine and Form Your Business Entity
After you have defined your purpose and chosen a name for your non-profit, the third step is to determine and form your business entity. In most situations in Oklahoma, forming a non-profit corporation will be the best choice. However, in some circumstances, you can form a non-profit limited liability company (LLC), but your LLC will need to meet 12 additional requirements under IRS regulations in order to apply for 501(c)(3) status. In Oklahoma, the Oklahoma Secretary of State will also require you to list three (3) incorporators if you choose to form a non-profit corporation. Thus, you cannot form a non-profit corporation in Oklahoma by yourself, it is a team sport.
4. Draft the Non-Profit's Bylaws
If you form a non-profit corporation, you will need to draft bylaws for the non-profit. The bylaws of your non-profit should be drafted by an attorney, and then executed by your board of directors. Not only should the bylaws include your purpose statement, but the bylaws should outline the responsibilities of the board of directors, and the roles of each officer of the non-profit organization.
5. Maintain Corporate Formalities
After you have formed a non-profit corporation (or non-profit LLC), it is important to maintain corporate formalities to separate the non-profit's assets from your own personal assets. The non-profit needs to obtain its own EIN number and have its own bank account. It is also important to document everything, including the minutes of each board meeting once the non-profit is formed.
At Liberty Legal Solutions, LLC, we assist people in forming and maintaining non-profit organizations. Packages for groups who wish to start a non-profit in Oklahoma start at $1,000.00, plus the filing fee required by the Oklahoma Secretary of State, and the application fee charged by the IRS for obtaining 501(c)(3) status. We can also serve as the non-profit organization's registered service agent for an annual fee of $150.00. If you are interested in forming a non-profit organization, please feel free to contact me at [email protected] for a free consultation.
If you are interested in starting a small business anywhere in Oklahoma, or if you have a small business and you are looking to grow, please feel free to contact me at [email protected]. For more information about Liberty Legal Solutions, LLC, please visit our website http://www.libertylegalok.com.