Starting a Florida Non-profit
There are several matters to consider when starting a non-profit, particularly if you want to form a 501(c)(3) organization.
Creating a Mission Statement
Whenever you form a new entity such as a non-profit organization, it helps to create a mission statement. Start with a broad view, then whittle it down to specifics. If some of your thoughts seem repetitive, this ensures that key details aren't overlooked.
501(c)(3) and Other Non-profits
Florida recognizes multiple types of nonprofits, including charitable, educational, religious, scientific and veterans organizations. None automatically qualify for tax exemptions at the state or federal level. 501(c)(3) corporations are tax-exempt federally. To achieve this status, incorporators must file Form 1023, an Application for Recognition of Exemption, with the IRS.
Considerations for Starting a Non-profit
Advantages:
- Assets or property belong to the corporation. In the event of lawsuits or creditor claims, only these assets are vulnerable, not the personal property of trustees, officers or managers. Incorporation creates a distinct legal entity and forms a layer of legal protection between the corporation and its members.
- Some Florida nonprofits qualify for exempt status regarding corporate income, property and other taxes.
Disadvantages:
- The planning process requires a significant amount of time and effort.
- If control, autonomy and independence in corporate governance are important to you, non-profit status might not be appropriate.
Requirements and Mandatory Forms for Creating a Non-profit
- Choose a name and check its availability.
- Recruit or appoint your directors. You should have at least three that are age 18 or older.
- Incorporate.
- File Articles of Incorporation with Florida Secretary of State, Division of Corporations.
- Designate a registered agent.
- File an annual report with the Florida Division of Corporations one year after you incorporate.
- Create bylaws.
- Hold an organizational meeting.
- Create corporate records in a records book.
- Obtain an employer identification number.
- Register with the IRS and the state of Florida when you hire employees.
- Register with Florida's Division of Consumer Services if you're soliciting contributions from the public.
- Register with Florida's Department of Revenue to handle business taxes.
- Apply for tax-exempt status with the IRS and the Florida Department of Revenue.
How to Retain Your Non-profit Status
Nonprofit incorporators understandably focus on securing tax-exempt, non-profit status. After you achieve this goal, you must take further steps to safeguard it and retain your organization's status.
- Articles of Incorporation must be filed with Florida's Secretary of State Division of Corporations.
- An annual report must be filed within a year of your nonprofit's incorporation, then again between Jan. 1 and May 1 of each subsequent year. After May 1, late fees are assessed.
Tax-Exemption and Other Benefits
Acquiring and keeping tax-exempt status requires several steps:
- A Florida non-profit must file Form 1023, the Application for Recognition of Exemption, with the IRS to obtain status as a 501(c)(3) corporation.
- To obtain state income tax exemption, submit a copy of your 501(c)(3) application to Florida's Department of Revenue. You must also submit a copy of the determination letter you'll receive from the IRS.
- File Form 1120, Florida Corporate Income/Franchise and Emergency Excise Tax Return, with the Department of Revenue.
- For sales tax exemption in Florida, file Form DR5, Application for a Consumer's Certificate of Exemption, with the Department of Revenue.
What It Costs to Form a Florida Non-profit
Florida charges a $35 filing fee for nonprofit Articles of Incorporation. You also must file a registered agent designation, and this costs $35. The IRS charges a $400 application fee if your organization's annual revenues are less than $10,000. Otherwise, the fee is $850.
Florida and National Non-profit Resources
University of Florida Nonprofit Organizational Leadership: This UF site is an informational clearinghouse for courses, tax forms, grant writing, skills, competencies, statistics and news.
Florida Association of Nonprofit Organizations.: FANO is Florida's state network of nonprofits. It hosts an annual conference on building capacity. Its site offers start-up kits and a certificate program in nonprofit management.
Nonprofit Center of Northeast Florida: The Center prides itself on nonprofit leadership, enhancing public understanding, and facilitating collective action from the community. Its website offers networking opportunities, a library, resources, summit, board bank, an events calendar and a newsletter.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
