You’ve drafted your bylaws and you’re ready to begin the next step in the process of forming your nonprofit organization. Drafting and filing Articles of Incorporation is an essential and fundamental step in obtaining 501(c)(3) tax exempt status. Incorporation is the formation of a new corporation – a requirement in receiving tax exempt status and registering the organization. In most circumstances, nonprofits are designated as corporate entities and must draft and file their Articles of Incorporation with the state in which they operate before applying for tax exempt status from the IRS.
501(c)(3) Articles of Incorporation Come With Benefits!
- Picked out your organization’s catchy, meaningful name? Once you’ve filed your Articles of Incorporation, your organization’s name is secured.
- Organization members, board members, and directors’ liability are limited within the Articles of Incorporation clauses.
- By registering your organization, you’ve enhanced its reputation, thus enticing volunteers, donors, and others to participate.
Be sure that if the Articles of Incorporation are filed correctly, this is a one-time process. But if they are filed incorrectly, they will need to be amended and things can get complicated thereafter.
Although the 501(c)(3) Articles of Incorporation structure will be outlined below, it is generally advisable to have state and/or federal documentation requirements reviewed by experts specializing in tax exempt organizations, such as our team at BryteBridge Nonprofit Solutions.
How to File Articles of Incorporation
Before you begin typing away, there are a few essential details you must sort.
Address: You must have an address in the state in which you’re operating. It will be written in the Articles of Incorporation along with a mailing address if it is different from your organization’s address.
Board of Directors: State that you are governed by a board of directors and list each person accordingly.
Bylaws: Have them handy for reference. This will ensure that there is no conflict with IRS regulations.
Name: Although filing your Articles of Incorporation will secure your organization’s name, you must make sure that it is available beforehand. This can be done by conducting a Business Name Search on the Secretary of State’s website. In most states, you can file a name reservation, allowing the name to be put on hold until you have incorporated. That can take time, so do that as early as possible.
What Do Articles of Incorporation Look Like?
Each state requires its own unique language and terms in the 501(c)(3) Articles of Incorporation. Below we have provided a basic sample outline of what Articles of Incorporation will look like, but it is a general example and may not adhere to the requirements of your state.
Article I: Name
The name of the corporation is: _________ .
Article II: Duration
How long will your organization run? Odd question, right? Did you know that the IRS rarely grants tax exempt status to organizations that do not state that their organization’s duration is perpetual?
The period of duration of the corporation is perpetual.
Article III: Purpose
The purpose of your organization must align with 501(c)(3) guidelines. In this area of your Articles of Incorporation, you can include information you’ve drafted in your mission statement here. Heads up! Don’t be too specific in this clause, because if your nonprofit organization expands in the future, you may have to amend this language.
Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code.
Article IV: Nonprofit Nature
This section includes a dissolution clause and a personal liability statement. In the eyes of the IRS, this is perhaps the most important clause in the 501(c)(3) Articles of Incorporation.
Article V: Board of Directors
The IRS states you must have a minimum of three board members, with their names listed. If you aren’t finished gathering your Board of Directors, that is okay. Insert the names and titles of the individuals you have assigned, and you can amend this area later.
Article VI: Membership
Although most nonprofits do not have members because they rely on their Board of Directors and bylaws for governance, you still need to include a clause with specific language as to whether or not you will have members in relation to the nonprofit’s governance.
(Organization’s name) shall have no members. The management of the affairs of the corporation shall be vested in a board of directors, as defined by the corporation’s bylaws.
Article VII: Amendments
Eventually, you will make amendments to your 501(c)(3) Articles of Incorporation; therefore, you must include language as to how amendments will be added.
Amendments to the Articles of Incorporation will be adopted with a ⅔ approval from the Board of Directors.
Article VIII: Addresses
Include the address of your organization in this clause. If your physical address is different from your mailing address, include both.
Article IX: Registered Agent
A registered agent is a person or entity that has been appointed to handle mailing and any arrangements on behalf of the organization. It is usually someone from the Board of Directors or a staff member in the organization. This individual’s address must be in the state in which you are operating.
The registered agent of the corporation is:
(Name and address)
Article X: Incorporator
The incorporator is the individual who signs and dates your 501(c)(3) Articles of Incorporation. It does not need to be a board member or a person who has an affiliation to your organization. Their name, address, and date of signature should be included in this clause. If this is your last clause, include the name and signatures of your Registered Agent and Board of Directors as well.
Still Not Sure How To File Articles of Incorporation?
The 501(c)(3) experts at BryteBridge Nonprofit Solutions can review and file your Articles of Incorporation for you, without error. It is highly recommended that before filing on the state or federal level, that a specialized expert reviews your document to ensure that it meets all state and federal requirements. Schedule a consultation today.