How to start a Missouri 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. 

Advantages and disadvantages of having a Missouri nonprofit organization

A nonprofit is an entity or association created to promote and maintain the well-being and greater good of a community, in which profits (or surplus) are directed towards the business and mission rather than divided among the owners and shareholders. Here are the pros and cons of having one in Missouri:
 

PROS

CONS

Missouri not-for-profits are exempt from Missouri income tax. Nonprofit organizations provide their shareholders, directors and officers with protection from liability. Some Missouri nonprofits have advantages in fundraising, especially 501(c)(3) nonprofits. A nonprofit organization can outlive its original organizers, unlike partnerships and associations. Not-for-profit organizations may be exempt from property taxes on all or part of their real property.

Although nonprofits are good for managing large numbers of members, they're not a good choice if you want personal control over your organization. Nonprofits require more time and money to create and maintain than sole proprietorships or partnerships. Grants from some federal and state government organizations may require nonprofit status.

How to form a nonprofit in Missouri

1. Developing a business plan for your Missouri 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 Missouri 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 Missouri

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.
 

Other forms and requirements for Missouri nonprofits: Form 1023, an Application for Recognition of Exemption, filed with the IRS for 501(c)(3) nonprofit status. Nonprofits that are exempt from federal tax are also exempt from Missouri corporation income tax and Missouri corporate franchise tax. 501(c)(3) nonprofits may also obtain an exemption from Missouri sales tax by filing a copy of the IRS determination letter, a three-year financial history, and Form 1746, the Missouri Sales/Use Tax Exemption, with the Missouri Department of Revenue.   Registration with the Missouri Attorney General's Office for charities that solicit or receive charitable contributions. This involves filing an initial registration statement. The filing is not required of 501(c)(3) nonprofits. Only a copy of the IRS determination letter and a note indicating that the nonprofit wants to start soliciting in Missouri are required of 501(c)(3) organizations.

5. Applying for grants and loans in Missouri 

Grants and loans from federal, state, and private sources are a major source of funding for Missouri 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 Missouri

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

• File an annual report with the Attorney General's office within 75 days of the end of your fiscal year.
• Maintain complete books and records of accounts, as well as minutes of board meetings, at your nonprofit's registered office.

Missouri nonprofit resources

• Nonprofit Missouri: Nonprofit Missouri provides training, networking, information, advocacy and discounts for Missouri nonprofits.

Still have questions? Learn more about how to register your own nonprofit with Rocket Lawyer and get started today!
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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 Missouri, like tax breaks and protection from personal lawsuits, but it also comes with extra paperwork and public financial records. After forming a Missouri 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