Since Liberty Legal Solutions, LLC, opened for business in June 2019, we've kept track of the different kinds of inquiries we've received for different types of legal work. Interestingly enough, the number one inquiry we've received is, “What about nonprofits? Can you help me form one?” The answer to that question is a resounding yes, we can help you form a non-profit organization, and further, we can help you maintain your non-profit organization once it is formed, as well. However, forming a non-profit organization is not an easy task, there are more details involved than forming an LLC or a for-profit corporation, and the process is more time-consuming. If you're interested in forming a non-profit organization, this blog post is for you. I want to share with you four keys to forming a non-profit organization in Oklahoma:
1. Define Your Purpose
The first key to forming a non-profit organization is that you need to define your purpose. A prospective clien recently contacted me and asked what the steps would be to form a non-profit corporation. I asked her why she wanted to form a non-profit organization. When she told me what kind of non-profit business she wanted to start, I asked her WHY she wanted to form a non-profit organization for such a highly regulated industry. She indicated a charitable purpose, which was a good thing. If you wish your non-profit organization to obtain 501(c)(3) status with the Internal Revenue Service (IRS), then you need to have a charitable purpose for your organization. You must define your purpose if you wish to start a non-profit organization.
2. Choose Your Business Entity
The second key to forming a non-profit organization is that you need to choose your business entity. Generally speaking, in most situation, choosing a non-profit corporation will be be the best choice to make. However, there are specific requirements to form a non-profit corporation, which are not required for other business entities. In some situations, you can form a non-profit limited liability company (LLC), and then apply for 501(c)(3) status with the IRS if your LLC meets 12 additional requirements under IRS regulations. These regulations cover a limited number of situations and are especially difficult in Oklahoma because the IRS will ask to review the LLC's operating agreement. So, in most situations, forming a non-profit corporation would be the best choice.
3. Gather Your Team
The third key to forming a non-profit organization is that you need to gather your team. In Oklahoma, the Secretary of State requires you to list at least three (3) incorporators in order to form a non-profit corporation. You cannot form a non-profit corporation in Oklahoma as a single person. This is an additional requirement that is not required in forming other business entities such as an LLC or a for-profit corporation. At this stage, you also need to begin identifying who your initial directors might be. Usually the three (3) incorporators will serve as interim directors until your formal Board of Directors is in place. You must gather your team if you wish to form a non-profit corporation.
4. Dot All Your I's and Cross All Your T's
The fourth key to forming a non-profit organization is that you must dot all your I's and cross all your T's. There are significant requirements in forming a non-profit organization that are more detailed than forming a for-profit corporation or LLC. If you wish to apply for 501(c)(3) status with the IRS, you will need to submit a copy of your Certificate of Incorporation for a non-profit corporation, in addition to a copy of your bylaws. In addition, for a non-profit LLC, the IRS will ask to review your operating agreement for the 12 requirements I mentioned earlier. Obtaining 501(c)(3) status is not guaranteed, and the IRS will expect you to get all the details right, to dot all your I's and cross all your T's. There is an easy approach to handling this part of the process, and that is to simply hire an attorney who can succesfully guide you through the process of forming your non-profit organization. Yes, it will cost you more money up front, but it will save you in the long run, because you will be able to start your non-profit organization on the right foot and focus on the non-legal aspects of running your non-profit organization.
At Liberty Legal Solutions, LLC, we assist people in forming and maintaining non-profit organizations. Packages for groups wishing to start a non-profit organization 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 in Oklahoma, please feel free to contact me at [email protected] for a free consultation.
Also, if you're interested in starting any kind of small business in Oklahoma, or if you have a small business and have legal questions or are looking to grow, please send an e-mail to [email protected] to set up a consultation. For more information about Liberty Legal Solutions, LLC, please visit our website http://www.libertylegalok.com.
There are no comments for this post. Be the first and Add your Comment below.
Leave a Comment