Managing The Process I
- An Organized Outline of Steps to Create a
Nonprofit
- Filing Paperwork with the Government (and
Paying Fees )
- Writing Your Articles of Incorporation and
Bylaws
- Keeping Current with Ongoing Filings with
the Government
Steps to Create a Nonprofit
I Creating the Nonprofit Under Ohio Law
The Ohio Secretary of State has an Articles of Incorporation
form that must be used to start a nonprofit corporation. You can read and
download the Articles of Incorporation form and instructions from the Secretary
of State's Web site. This link will take you directly to the form and
instructions
http://www.sos.state.oh.us/SOSApps/Forms/Form.aspx?
return=/SOSApps/SOS/FormRefBS.aspx
&type=BusinessServices&code=532
The Federal government has created and placed articles online
called "Tax
Information for Charitable Organizations." The IRS web site
(http://www.irs.gov/charities/charitable/index.htmll)
offers information about starting the organization, applying for tax-exempt
status, filing requirements, making sure you are following rules and many, many
other subjects.
II Complete the Articles of Incorporation
Some of the things you will need are
-
Name, location and effective date. The name you choose must
be different than any existing corporation's name. In Ohio, you can call
1-877-SOS-FILE to make sure the name you want is not already being
used. Also, you must list the city, village or township and where the
corporation is located.
You can choose the date that
the nonprofit will officially be in business, which must be less than 90
days from the date you file the Articles of Incorporation. If you don't
choose a date, the effective date is the date of filing.
-
Purpose Clause. The Articles of
Incorporation must include a purpose statement (the specific reason the
nonprofit is being formed). If a nonprofit is applying for tax-exempt
status with the Internal Revenue Service (IRS), the exact same purpose
statement needs to be included in the information sent to the IRS. The
Internal Revenue Service Publication Number 557, "tax-exempt status for your
organization," contains samples of the required language and is available
for free from the IRS Forms Distribution Center, P.O. Box 8903, Bloomington,
Illinois (61702-8903)
http://www.irs.gov/publications/p557/ar01.htmlGeneral
IRS Information for Charitable Organizations
http://www.irs.gov/instructions/i1023/ar01.html#d0e183
First, the specific purpose written in your Articles of
Incorporation must be explained. For example, if your nonprofit wants to
promote aerobic exercise as a sport and means of healthy exercise, the
specific purpose clause may be "to promote and encourage aerobic exercise as
a sport and means of healthful exercise." The purpose given must meet
the nonprofit laws listed in Section 501(c)(3) of the Internal Revenue Code
if you plan to be tax-exempt
http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000501----000-.html
-
Appointment of Statutory Agent.
Every nonprofit corporation must have a statutory agent who is the "contact
person" for all legal matters and is the one who receives the corporation's
legal documents. A statutory agent does not have to be a lawyer. The name
and address of the statutory agent must be included in the original Articles
of Incorporation and in the Original Appointment of Statutory Agent form.
The statutory agent must acknowledge and accept the appointment. The
original appointment of statutory agent is done on the initial articles of
incorporation form 532
http://www.sos.state.oh.us/SOSApps/Forms/Form.aspx?return=/SOSApps/SOS/FormRefBS.aspx&type=BusinessServices&code=532
-
Name the Directors. In your
Articles of Incorporation, you may choose to list the names and addresses of
the first directors. Usually, the first directors are the
incorporators (the individuals who organize and start the corporation) and
others recruited by the incorporators. The directors do not have to be
listed on the initial Articles of Incorporation if they wish to keep their
names and addresses private.
Ohio law requires a
director to perform his/her duties in good faith and in a way he/she
believes is in the best interests of the corporation. The Ohio Attorney
General has a pamphlet, offering advice for persons serving as directors of
nonprofit corporations, which you can find at
http://www.ag.state.oh.us/business/pubs/char/05guide_boardmembers.pdf
-
Filing Articles of Incorporation.
After the Articles of Incorporation and Original Appointment of Statutory
Agent forms are completed, the incorporators must sign it, with names typed
under their signatures. Then they can be sent with the current fees to the
Ohio Secretary of State's office.
III Code of Regulations
A nonprofit corporation must have a Code of Regulations that
lists the rules and conduct of its affairs and management of assets.
The Code of Regulations may include rules such as:
- Member meeting requirements.
- Membership requirements, rights and responsibilities.
- Officers, duties, terms and elections.
- Removal of officers, trustees or members.
- Amendments to the regulations.
IV Ongoing filing obligations
Within five years of the date of incorporation (or of the last
filing), a nonprofit must complete a form (Statement of Continued Existence,
Form 522) and send it with the current filing fee to the Secretary of State's
office. This must be done to keep the corporation's name and to continue being a
nonprofit corporation. Think of this as a renewal process. Forms must be
kept up-to-date and regularly (as required) mailed to the correct government
office. Again, the Secretary of State's web site is probably the best source for
information
http://www.sos.state.oh.us/SOSApps/Forms/Form.aspx?return=%2fSOSApps%2fSOS%2fFormRefBS.aspx&type=BusinessServices&code=522
V Reporting to the Ohio Secretary of State
These are links to the legal forms that must be filed with the
Secretary of State's office:
These forms, along with all other business forms, are listed
on the Secretary of State's web site at this address
http://www.sos.state.oh.us/SOSApps/SOS/FormRefbs.aspx
VI Reporting to the Ohio Attorney General
The Ohio Attorney General supervises the activities of
nonprofit organizations. The Ohio Charitable Trust Act is a law that requires
nonprofits to register with the Ohio Attorney General within six months after
the organization is created. The Ohio Attorney General also supervises
nonprofits that ask for funds from the public for charitable purposes. An
organization that intends to ask for contributions must already be registered
with the Attorney General. These organizations need registration statements and
must file an annual financial report with the Ohio Attorney General. The
Solicitation Registration Form and Annual Financial Report can be found on the
Ohio Attorney General's Web site at
http://www.ag.state.oh.us
VII Local Solicitation and Reporting Requirements
Nonprofits should know and follow all laws about asking for
donations and reporting information to their city. Nonprofits may be
required to get a permit to ask for donations from the public and may be
required to report any donations received and any expenses paid.
An example of solicitation code section for Toledo listed
under "Business Regulations."
http://www.amlegal.com/nxt/gateway.dll/Ohio/toledo/toledomunicipalcodef=templates$fn
=default.htm$3.0$vid=amlegal:toledo_oh$anc=
This site offers general links to a variety of Ohio municipal
codes. Here is a link to the Bowling Green page which gives an opportunity to
view the solicitation code from Bowling Green:
http://www.amlegal.com/library/oh/bowlinggreen.shtml
Below is a link to a library which allows you to view all
available online Ohio municipal codes. Not all are online but this has a
very large selection
http://www.amlegal.com/library/oh/index.shtml
A reminder that this is a
complicated subject and site users should not try to set up any portion of a
nonprofit corporation based solely on the information they find on this site.
You should work with specialists in each area and seek advice from an attorney
or CPA.
Continue to Managing the Process "Ending
the Nonprofit"
- Voluntary Dissolution
- Certificate of Merger
- Certificate of Consolidation
- Merger
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