How to form
a 501(c) (3) nonprofit corporation.
A nonprofit corporation is purpose-driven,
a company whose goal is not to make profit for themselves.
Typically they are an organization that wants to make money
in order to help further a social cause
or provide a public benefit.
Let's get you started on the right path
to forming a nonprofit corporation in Louisiana.
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If you're not sure what a nonprofit is check out our other
video 'What is a Nonprofit', linked below?
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How do you form a nonprofit corporation?
There are two ways.
You can do it yourself
or you can hire a service to do it for you.
Let's take a look at both options and help you decide
how to go about forming your own nonprofit corporation.
Option one, do it yourself.
If you want to save money
you can form a nonprofit corporation on your own.
Let's take a look at the steps to forming
a nonprofit corporation on your own.
One, choose and secure your nonprofits name.
The name you select for your nonprofit
will establish its brand.
It's the first thing most people will learn
about your organization.
It's important to pick a name that both aligns
with your mission and follows the rules
of naming guidelines in Louisiana.
You'll need to check Louisiana specific naming requirements
but in general, follow these rules when choosing a name.
The name you pick for your organization
should not include any words or terms
that could be considered grossly offensive or misleading.
The name must be distinct
from that of any other corporation in Louisiana.
For more information on what makes a name distinct
check out our other video
'How to Name your Business in Louisiana', linked below.
Once you have a name selected,
do a name search to make sure it's available in Louisiana.
After doing a Louisiana name search
you want to do a domain search to see
if your name is available as a URL.
Even if you don't plan on making a website today,
you may want to secure the URL so someone else
doesn't take it.
Two, appoint a registered agent.
The registered agent can be an individual
in the company, including yourself, or you can hire
a professional service authorized
to do business in Louisiana.
They will send and receive legal papers on your behalf.
These documents include official correspondence
like legal summons and document filings
which your registered agent will receive and forward to you.
Your registered agent will also help remind you to file
the necessary reports.
Failure to properly maintain your nonprofit
can result in fines and dissolution.
So this assistance is valuable.
Three, select directors and officers.
Your nonprofit corporation will be made up of some number
of directors and officers.
The directors of a nonprofit are responsible
for overseeing the operations of the organization
Together, they formed the board of directors.
The power and influence of the directors
over the organization comes from them as a board.
The directors themselves
do not have any authority as individuals.
The board typically creates the policies
that govern the nonprofit.
They also oversee management level hiring
such as the company officers.
The officers of the nonprofit, such as the president
or secretary are individuals who the responsibilities
and the authority to execute based
on their job description.
Together, the officers on the board will come together
to make up the organizational structure of your nonprofit.
An officer may also be on the board of directors
and self wealth roles if allowed to do so
by the organizational bylaws, which we will discuss later.
If your organization plans to apply for 501(c)(3) status
for federal tax exemptions it must elect
at least three directors, not related to each other,
a president and a secretary.
Four, file the Articles of Incorporation.
To form a nonprofit corporation you will need
to file official papers with Louisiana.
In Louisiana, this is called the Articles of Incorporation.
Some possible information in the Articles of Incorporation
you may have to include is, name, purpose, duration,
registered office, registered agent, incorporator,
board of directors, other provisions and execution.
For more information on the sections
of the Louisiana Articles of Incorporation
check out our page link below.
Five, file with the Recorder of Mortgages.
Take a moment to locate the Recorder of Mortgages
in the parish where the organization's office is located.
Within 30 days of filing the Articles of Incorporation
you must file with the Recorder of Mortgage Office
the following documents, a Secretary of State certified copy
of the Articles of Incorporation
and a copy of the certificate of Incorporation.
You can read the exact rule linked below.
Six, operating procedures in housekeeping.
Once your Nonprofit corporation has been formed,
you'll want to start getting the structure
of it together and determine how your non-profit
will be run, starting with the bylaws
and conflict of interest policy.
Your bylaws are the rules that determine
how your organization will be governed and run?
You can think about it as a constitution for your nonprofit.
It makes the rules and priorities clear
for everyone involved.
In your bylaws, be sure to include
how the nonprofit will be governed,
the roles of directors and officers,
how meetings are held, voting procedures,
electing officers or directors,
how records will be kept and managed,
how disputes will be handled and how bylaws will be added
and amended in the future.
When you're ready to get started,
check out some bylaws templates linked
in the description below.
The Conflict of Interest Policy or the rules set to ensure
that decisions being made for the nonprofit are based
on what is best for the organization and not being motivated
by what is best for individuals.
You'll want to make sure you have a draft of both the bylaws
and conflict of interest policy
before your organizational meeting.
We have templates of both bylaws and conflict
of interest policy linked in the description below.
An organizational meeting is the first official meeting
of your nonprofit.
Some of the things that are discussed
in a typical organizational meeting are;
taking attendance to show you have a quorum,
appointing temporary officers and chairman,
adoption of bylaws and adoption of conflict
of interest policy.
It's important to record minutes of the meeting
and have it signed by all attending directors.
We have some corporate minutes templates linked
below to help you get the ball rolling.
After your nonprofit has been formed, you'll need to apply
for an EIN or Employment Identification Number.
An EIN is like a social security number for your nonprofit
and it's used for things like filing for 501(c)(3) status,
opening a bank account, applying for tax exempt status
and submitting tax returns.
For more information on EINs,
check out our other video linked below.
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Your organization will need to apply
for a state taxpayer identification number
using form R16019 linked below.
You can apply online or by mail.
It will take about three days to process
if you are applying online.
If you're applying by mail, expect the processing
to take four to six weeks.
Seven, apply for 501(c)(3) status, federal tax exemption.
What is federal tax exempt status
and why do you want it?
When a corporation generates income,
that corporation has to pay a federal income tax.
As a nonprofit, your goal is to generate income
that is used to help further a cause rather
than fill the pockets of the company employees.
Because of this, the federal government
allows that nonprofits income not be taxed
so that more of the money can go towards
the cause that the nonprofit is supporting.
Before your nonprofit can apply for 501(c)(3) status
it must file the Articles of Formation
with the required provisions,
adopt the bylaws and conflict of interest policy
and have an EIN number.
In order to file for tax exempt status
most organizations will need to file form 1023 online
or by mail and pay a fee of $600.
If your organization's annual gross receipts
are below $50,000, then you may be able to file form 1023-EZ
with a fee of $275.
You can check your eligibility with the link
in the description below.
Once you've received your letter of determination
from the IRS, submit a copy of that letter
to the Louisiana Department of Revenue
to be exempt from state taxes.
Option two, the second way it's a form of nonprofit
is to hire a professional service
to create your nonprofit for you.
Hiring a professional service to file your forms
and act as your registered agent for the nonprofit will cost
you an additional 50 to $150.
This fee only covers formation of a nonprofit corporation.
If you wish for the professional service to file
for 501(c)(3) status the cost may go up
to as much as $1,700 plus filing fees.
However, there are several benefits to working with a pro.
A hired registered agent helps with getting your reports
filed on time, helps you stay organized
by keeping your business mail separate and is available
at all regular business hours to accept official mail
and legal papers on your non-profits behalf.
If you want to form an organization or company in Louisiana
with the purpose being to help a cause rather
than make a personal profit, a nonprofit corporation
is the best way to do that.
Now you know all the steps to form a nonprofit in Louisiana.
For a more detailed guide,
visit our site at StartupSavant.com.
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If you have questions or encounter any roadblocks,
leave a comment below.
Good luck in starting your nonprofit.