Starting a Non-profit
Read on for valuable information when starting a nonprofit.
Creating a Mission Statement
As you form an entity, start with a broad view and drill down to specifics. The process may be circular, but repetition in brainstorming will ensure key details are not omitted.
501(c)(3) and Other Non-profits
Multiple non-profit are recognized in Mississippi: charitable, educational, religious, scientific, healthcare, and veterans. None of them are automatically tax-exempt. 501(c)(3) corporations enjoy tax exemption federally. To achieve this status, non-profit organizers in Mississippi must file Form 1023, Application for Recognition of Exemption to the IRS and pay a filing fee tagged to yearly revenues.
Considerations When Creating a Non-profit
- Assets or property at risk in lawsuits or creditor claims belong to the corporation and attach only to its assets and property, not to personal property of trustees, officers, or managers.
- Non-profits may qualify for tax-exemption.
- Incorporation creates a legal buffer between the corporation, on one hand, and trustees, officers, and members in management, leadership, and governance, on the other.
- Significant time and effort are expended when planning nonprofits.
- If control, autonomy, and independence in corporate governance are key values to you, nonprofit status is not well-suited to your needs.
- Time and money requirements for Mississippi incorporation and meeting filing requirements can be prohibitive.
Requirements and Mandatory Forms for Creating Non-Profits
When creating a nonprofit, you must satisfy a few requirements. Here is a roadmap:
- File Articles of Incorporation with Office of the Secretary of State. Pay $50 filing fee for Articles.
- File Resolution Designating Mississippi Agent to identify name and address of your Mississippi-based registered agent. Pay $25 filing fee for Resolution.
- File Nonprofit Status Report if requested by Office of the Secretary of State. The Status Report is akin to a for-profit corporation's Annual Report. It may be requested every five years. A Status Report may be voluntarily filed by a nonprofit at any time, in hard copy. Pay $25 filing fee for Status Report.
To Operate and Form a Mississippi Not for Profit, File These Mandatory Forms:
- Articles of Incorporation
- Resolution Designating Mississippi Agent
- Status Report, if requested
Retaining Mississippi Not for Profit Status
Not for profit organizers focus on securing their nonprofit status. After achieving that objective, focus shifts to retaining that status. We understand those concerns and assist you in meeting requirements to retain your non-profit status:
- Articles of Incorporation: File with Secretary of State's Office and pay $50 filing fee.
- Resolution Designating Mississippi Agent: File with Secretary of State and pay $25 filing fee.
- Status Report(s): File with Secretary of State, if requested, or any time voluntarily and pay $25 filing fee. Must be filed in hard copy format, as there are no online capabilities.
- Organizational Meeting: Once formed as a nonprofit, you must hold an organizational meeting. Meeting must take place within 2 years of date of incorporation under state law or nonprofit's charter is void.
- Charity Registration: Further registration as a charity may be required if you will be soliciting funds from the public, including online. Contact Secretary of State's Securities and Charities Enforcement Division for information.
- FEIN: Obtain a federal employee identification number (FEIN) from the IRS.
- Unemployment Insurance Registration: If you have employees, register for unemployment insurance with Mississippi Department of Employment Security.
- Keep Records: State law requires you to record accounting information, minutes of all members and board of directors' meetings, and a list of members. The state code specifies the full list of records that must be maintained by a corporation.
- Trademark and Service Mark Registration: Register with state (Mississippi Secretary of State) and federal (U.S. Patent and Trademark Office) authorities if you will be using trademarks or service marks.
Tax exemption status and related benefits
After completing mandatory responsibilities for obtaining non-profit status, there are further requirements to acquire and retain tax-exemption. Being a nonprofit does not equate to achieving tax-exemption.
- To obtain status as a 501(c)(3) corporation, a Mississippi non-profit must file Form 1023, Application for Recognition of Exemption with the IRS; P.O. Box 12192; Covington, KY 41012-0192. Filing fee is $850 unless yearly revenues are below $10,000. If revenues are lower, the filing fee lowers to $400.
- Tax-exempt status has federal and state components. 501(c)(3) is the federal component with the IRS for income taxes.
- To retain tax-exempt status, file Form 990-N, Form 990-EZ, or Form 990 with IRS, based on annual gross income receipts.
- Nonprofits in Mississippi must register with State Tax Commission (MSTC).
- Some nonprofits might qualify for state tax-exemption. Contact the Mississippi Department of Revenue or a tax advisor for more information.
What It Costs to Form a Non-profit in Mississippi
As a non-profit in the Magnolia State, there is a $50 fee to file Articles of Incorporation with Secretary of State's Office. There is an additional $25 fee to file the Resolution Designating Mississippi Agent for your register agent designation.
Mississippi and National Non-profit Resources
The Magnolia State offers online resources to assist your not for profit:
Mississippi Center for Nonprofits: The state's exclusive nonprofit management resource center offers training, advice, coaching, connections, and technical information.
Foundation for the Mid South: The foundation's mission is to invest in people and strategies that build philanthropy and promote equity in Mississippi.
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.