How to start an Arkansas nonprofit

Start by doing research. Is your nonprofit serving a mission in the community? And do you have the means to maintain it? Then make your case: write your mission statement, think about a name, and select your directors carefully. After that, all there’s left to do is file. 

How to form a nonprofit in Arkansas

1. Developing a business plan for your Arkansas nonprofit

• Define the purpose and goals of the organization.
• Research the issues and determine what resources you have and need.
• Establish your priorities.
• Market your idea to possible volunteers and board members.
• Create a budget and timeline.

2. Writing a mission statement 

A mission statement clarifies your goals and explains how you plan to meet them. As a guideline, describe what, where, when, and how your nonprofit's purpose will be met, as well as who is going to help your nonprofit meet it. It may take a few tries to narrow your ambitions down into a workable plan.

Although you're creating a nonprofit because you want to give back to your community, you still have to meet certain requirements to protect yourself and to ensure that you achieve your organization's goals. When you create a mission statement, you can explain your organization's purpose. Consider what problem or issue your organization wants to address, then focus your statement on including the efforts and values that will guide your nonprofit to these goals.

3. Choosing a unique name 

Your nonprofit's name must be distinguishable from existing names registered with the Arkansas Secretary of State. This means it shouldn't be the same as or too similar to another organization's name. The name should also not be misleading to the public – it must accurately reflect the nature and purpose of your organization.

4. Filing your Articles of Incorporation in the state of Arkansas

This is the legal document that brings the business to life. It includes important information like the nature of the company and the location of the corporate headquarters. Once accepted, the corporation becomes its own legal entity.
 

What to include in the Articles of Incorporation for your Arkansas nonprofit: Your nonprofit's name. How long your nonprofit will last. This can be "perpetual." Whether your nonprofit is a public benefit, mutual benefit, or religious organization. The address of your principal place of business. The name and address of a registered agent. The names and addresses of your initial board. You should have at least three directors. A statement indicating whether your nonprofit will have members. How assets will be distributed to other nonprofits, if yours stops operating.

5. Applying for grants and loans in Arkansas 

Grants and loans from federal, state, and private sources are a major source of funding for Arkansas nonprofits. A not-for-profit corporation is responsible for complying with grant requirements and keeping appropriate records. It's important for nonprofits to keep money received from grants separate and apart from the nonprofit's general fund. A good reputation in administering grant monies helps nonprofits obtain more funding from these sources. 

What to do after forming a nonprofit organization in Arkansas

After forming your Arkansas nonprofit organization, you must follow specific guidelines to retain your status:

• Your nonprofit must make an annual disclosure to the Secretary of State. It should also file a copy of its tax information returns with the Attorney General. 
• Your not-for-profit corporation must follow many of the same procedures and keep many of the same records as a for-profit corporation. Accurate records protect both your liability and tax-exempt status. All records should be easily accessible for review:
  • Keep corporate records. Include your Articles of Incorporation, bylaws, policies, meeting minutes, and tax exempt filing paperwork. If you have voting members, include their names and addresses.
  • Record all financial transactions appropriately. Keep copies of all receipts for reimbursement.
• Do not make loans to any of your directors or officers.
• Do not issue shares of stock or pay out dividends or other shares of income to members, directors, or officers.
• If required based on your annual gross receipts, file a Return of Organization Exempt from Income Tax form with the IRS each year.
• Income from commercial activities not related to your charitable purpose is taxable. These activities could jeopardize your nonprofit status if they make up a substantial portion of your business.

Arkansas nonprofit resources

1. Arkansas Secretary of State: The Secretary of State offers general information about nonprofits.
2. Legal Guide for Arkansas Nonprofit and Volunteer Organizations (PDF): This booklet explains the basics of both Arkansas and federal regulations for nonprofit corporations.
3. Arkansas Small Business and Technology Development Center: The Arkansas Small Business and Technology Development Center offers helpful information for finding grants.

Still have questions? Learn more about how to register your own nonprofit with Rocket Lawyer and get started today!
 

Key takeaways Starting a nonprofit takes planning, like creating a mission statement, picking a name, and choosing responsible directors to lead the group. There are good things about having a nonprofit in Arkansas, like tax breaks and protection from personal lawsuits, but it also comes with extra paperwork and public financial records. After forming an Arkansas nonprofit, it’s important to stay organized, follow state laws, and stay focused on helping the community to keep your nonprofit status.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a nonprofit organization?
• How to start a nonprofit organization
• How are nonprofits taxed?
• How to get 501(c)(3) tax-exempt status
• How to register a nonprofit by state