How to form 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 Oklahoma.
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If you're not sure what a nonprofit is
check out our other video,
what is a nonprofit linked below.
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 six 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 Oklahoma.
You'll need to check Oklahoma 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 Oklahoma.
For more information on what makes the name distinct
check out our other video
how to name your business in Oklahoma, linked below.
Once you have a name selected
do a name search to make sure it's available in Oklahoma.
After doing an Oklahoma 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 Oklahoma.
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 in 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 form 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 with 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 serve both 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.
Four, file the certificate of incorporation.
To form a nonprofit corporation
you will need to file official papers with Oklahoma.
In Oklahoma this is called the certificate of incorporation.
Some possible information in the certificate
of incorporation you may need to include is,
entity name and type,
registered agent and registered office,
duration, purpose, directors
and operators in any supplemental provisions.
For more information on the sections
of Oklahoma certificate of incorporation,
check out our page linked below.
Five, operating procedures and house-keeping.
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 videos linked below.
Six, 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 certificate of incorporation
with 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.
To obtain exemption from Oklahoma corporate income tax,
you must submit the registration application linked below
to the Oklahoma tax commission.
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 nonprofits behalf.
If you want to form an organization or company
in Oklahoma 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 forming a nonprofit in Oklahoma.
For a more detailed guide, visit our site @StartupSavant.com
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If you have questions or encounter any roadblocks
leave a comment below.
Good luck in starting your nonprofit.