Starting Your Nonprofit
There are several things to consider when you start a non-profit, especially if you plan to form a 501(c)(3) organization.
Creating a Mission Statement
When you create your mission statement, begin with a broad view of what you want your nonprofit to accomplish, then pare it down to specifics. The process may feel a bit repetitive at first, but this will help you make sure you don't leave out any important details.
501(c)(3) and Other Types of Nonprofits
West Virginia recognizes several types of non-profits, including educational. charitable, scientific, religious, healthcare and veterans organizations. None are automatically tax-exempt. To achieve this status, non-profits must file Form 1023, an Application for Recognition of Exemption, with the IRS.
Considerations for Starting a Nonprofit
Advantages:
- Non-profits might qualify for tax-exemption.
- Only the corporation's assets or property are vulnerable to your nonprofit's lawsuits or creditor claims. The personal property of trustees, officers and managers is not at risk.
Disadvantages:
- Planning a nonprofit requires significant time and effort.
- If control, autonomy, and independence in running your organization are important to you, nonprofit status may not be right for you.
- Meeting West Virginia's incorporation filing requirements takes time and money.
Requirements and Mandatory Forms for Creating a Nonprofit
- File Articles of Incorporation and your nonprofit IRS attachment with the Secretary of State, using form CD-1NP.
- File your nonprofit 501(c)(3) attachment with the Secretary of State, using form CD-3.
- If your nonprofit was incorporated in a state other than West Virginia, file an Application for Certificate of Authority with the Secretary of State, using form CF-1.
- File a Name Reservation with the Secretary of State on Form NR-1.
- File a Name Registration with the Secretary of State on Form NR-2.
- File a Trade Name Registration with the Secretary of State on Form NR-3.
- File a Trademark and Service Mark Application with the Secretary of State on Form TM-1.
- File a Registration of Emblems with the Secretary of State on Form EMB-1.
- File an annual report by end of business on June 30 of each year. Foreign nonprofits incorporated outside of West Virginia must file their reports between Jan. 1 and July 1 of each year, following the calendar year in which the business registered with the Secretary of State.
- If you receive contributions, donations or grants, your nonprofit may have to register as a charitable organization.
How to Retain your Nonprofit Status
After you achieve nonprofit status, you must turn your attention to keeping it. This involves filing your Articles of Incorporation with the nonprofit IRS attachment, the application for a Certificate of Authority to conduct business in the state, all other required forms, and staying current with your annual reports.
Tax-Exemption and Other Benefits
Federal Tax Exemption:
- To obtain status as a 501(c)(3) corporation with exemption from federal income taxes, file Form 1023, Application for Recognition of Exemption, with the IRS.
- To retain your tax-exempt status, file Form 990-N, Form 990-EZ or Form 990 with the IRS, depending on your non-profit's annual gross income.
State Tax Exemption:
Purchases made by a tax exempt nonprofit with a current registration certificate are exempt from West Virginia sales and use taxes if the organization meets all requirements in West Virginia Code.
What it Costs to Form a West Virginia Nonprofit
- West Virginia charges a $25 filing fee for non-profit Articles of Incorporation, plus $25 for the nonprofit 501(c)(3) attachment.
- There is a $50 fee to file the application for a Certificate of Authority to conduct business in West Virginia.
- The fee for filing annual reports is $25.
- The IRS charges an $850 application fee to nonprofits with annual revenues exceeding $10,000. If you expect that your nonprofit's revenues will be less than that, the fee is only $400.
West Virginia & National Nonprofit Resources
West Virginia Grantmakers: The West Virginia Grantmakers Association offers services and programs to grantmaker members. It's a forum for funders to discuss interests, learn about issues, exchange information, hone skills, and establish networking relationships.
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.
