The three main legal forms that a nonprofit organization may take are as (1) a c

Question

The three main legal forms that a nonprofit organization may take are as (1) a corporation, (2) a trust, or (3) an unincorporated association. For purposes ofthis question, please focus only on a corporation. Please describe briefly the steps that would be needed for an organization to form a new corporation in which to conduct its operations. The three main legal forms that a nonprofit organization may take are as (1) a corporation, (2) a trust, or (3) an unincorporated association. For purposes ofthis question, please focus only on a corporation. Please describe briefly the steps that would be needed for an organization to form a new corporation in which to conduct its operations.

Explanation / Answer

Steps that would be needed for an organization to form a new corporation are as follows.

1- Deciding a name- This is the first step which means a name should be decided of a nonprofit corporation.

2. Appoint directors- Directors are the one who will be responsible to run the organization and also to decide further steps ti form the organization.

3-File articles of incorporation- To get tax exempt status, articles of incorporation must be submitted in state's corporate filing office. some basic information such as your nonprofit's name and office address is filled in this document.

4-Apply for your IRS tax exemption- Apply and submit a federal 501(c)(3) tax exemption application to the IRS (along with a copy of your filed articles with your application). But first you must complete IRS Package 1023, Application for Recognition of Exemption.

5-Apply for a state tax exemption- An organization must complete a separate application to get a state tax exemption. In order to to get your state exemption you must send in a copy of the IRS determination letter that granted your federal exemption.

6- Draft bylaws- These are important for smooth running. Bylaws are the internal rules for governing purpose to follow rules and procedures for holding meetings, voting on issues, and electing directors and officers.

7- Obtain licenses and permits- Then in next step, State department of consumer affairs needed to be contacted for information concerning state licensing requirements.

8- Meeting- As a last step a meting of appointed board directors should be held to adopt bylaws, electing officers, and recording the receipt of federal and state tax exemptions. After the meeting is completed, minutes of the meeting should be created and filed in the nonprofit's records binder.

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