
Obtaining non-profit status (your 501c3) is not hard, but it does require a significant time commitment and some of the same skills and exercises it takes to write a business plan.
1. Register assumed business name at Register of Deeds - ~$30
• Decide Registered Agent
2. Form business entity with Secretary of State’s Office - $125+
• Inc. - Articles of Incorporation details business purpose.
a) Do yourself or hire business attorney.
b) Samples available.
c) NC Secretary of State Form B-01
• Separate personal and corporate assets, i.e., bank accounts, inventory, etc.
• QuickBooks Simple-Start accounting software is free.
• If LLC – Articles of Organization
a) Single member LLC possible.
b) Multi-member, Manager-Managed (popular)
• Board of Directors, Bylaws, Operating Agreement, Shareholder Agreement, etc.
a) The Board of Directors and not management ultimately responsible
for the organization’s performance (fulfilling the mission).
• Possible to get 501c3 w/o Inc or LLC, but unusual.
3. IRS Form SS-4 (Application for Employer Identification Number)
• Quicker & instant if done online (~15 min.)
• IRS Time Estimate: 10 Hours 10 Minutes.
• EIN & Articles of Incorporation needed to open business bank account. Some banks offer free business checking.
4. IRS Form 253 (Election by a Small Business Corporation).
• S-Corp Election – taxed to shareholder vs corporate itself.
• IRS Form 2553 – Time estimate: 16 Hours 22 Minutes.
5. File IRS Form 1023 (with IRS - ~$800
• 30 page form (without schedules & attachments) – like writing a business plan
• 100 hour estimate to complete
a) 2-9 month IRS approval time: Initial Response, Follow-up Q&A,
Determination Letter, etc.
6. Apply for NC Dept of Revenue tax exemption
7. Request NC Charitable Solicitation Letter
8. Annual file IRS Form 990 (Return of Organization Exempt From Income Tax)
9. Industry buzz words:
• Trust, accountability, transparency & performance.
10. Unlimited pro-bono legal assistance may available for low-wealth organizations.
NC LEAP is non-profit arm of NC Bar Association.
• Mary Horowitz, Director
• http://ncleap.ncbar.org/
• Not as many pro-bono opportunities for non-profits.
SOURCES:
Martin, Marty, JD MPA. (2010, May 20). Starting a Non-Profit. Presentation given at Cameron Village Regional Library, Raleigh, NC.
Matt Cunningham, Esq. (2010, May 18). Choosing Forming and Maintaining A New Business
Structure. Presentation given at Raleigh Business and Technology Center/NC LEAP, Raleigh, NC.
BizFilings – The Small Business Incorporation Experts. (n.d.). Filing for Tax-Exempt
Status for Non-Profits. Retrieved May 20, 2010 from http://www.bizfilings.com/learn/tax-exempt-nonprofit.aspx .
Mary Horowitz, Esq. (2010, May 4). Applying for Pro-Bono Assistance. Presentation given at Raleigh Business and Technology Center/NC LEAP, Raleigh, NC.
--Lorrinda S. Michieka, MBA, PMP
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