A non-profit organization typically refers to an organization of concern on public or community benefit which works without the purpose of making a profit, unlike many other regular, not for profit organizations. There are various types of non-profit organizations as identified by the Internal Revenue Service (IRS).
Types of Non-Profit Organizations:
- Social welfare organizations
- Charitable or religious organizations
- Veterans’ organizations
- Labor and agricultural organizations
- Business leagues
Each of these types has different tax benefits and required to comply on different restrictions.
Additionally, there are also some professional accounting firms also known as Chartered Professional Accountant (CPA) firms which work for non-profit organizations. These non-profit CPA firms provide financial and consulting services for non-profit organizations.
Following any type of non-profit organization, there are a few things to when incorporating the same. They are as follows.
Steps to register Not for Profit Organization: The Process
- Name for the business: First and foremost is to select an appropriate name for your non-profit organization. It should be unique and hence thorough research should be put on any nominated names. Also, due diligence and care should be taken to find out more on the law of naming a non-profit organization to perform all actions legally and in a proper manner.
- Board of Directors: Next it is important to select a suitable Board of Directors for the non-profit organization and draft all bylaws with the help of the board.
- Legal structure: Thereafter decide on the legal structure of the organization, be it an association, corporation or a trust.
- File incorporation paperwork: Next you must file formal paperwork required to incorporate a non-profit organization as per the rules and regulations and procedure in your region/ country. There would also be a minimal fee to pay to your state for this purpose. The state office for your region could be looked up through the National Association of State Charity Officials (NASCO).
- Non-profit federal and state tax exemptions: As a non-profit organization you may be exempted from some of the federal and state tax requirements such as income tax. Hence it is important to apply for these tax exemptions formally through the guidance provided by the IRS.
- Licenses and permits: Any organization requires the relevant licenses and permits needed to comply with federal, state and local rules. Hence it is important that the same be obtained for your non-profit organization.
These are the basic steps to be followed in order to incorporate a non-profit organization and make it up and running successfully in a legal manner.