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Are you passionate about making a difference in your community? Starting a nonprofit organization in North Dakota can be a fantastic way to create lasting change and positively impact the lives of those around you. However, navigating the legal and regulatory requirements of starting a Nonprofit Corporation can be daunting, especially if you are new to the process.
This guide aims to simplify the process of forming a Nonprofit Corporation in North Dakota by providing a step-by-step approach to ensure that your organization is set up for success from the start. At LLCBase, we understand that forming a nonprofit corporation can be an overwhelming experience, so we are here to help you achieve your goals every step of the way.
On this page, you’ll learn about the following:
- What is a Nonprofit Corporation
- Steps to Form a North Dakota Nonprofit Corporation
- Step 1. Choose a Name
- Step 2. Appoint North Dakota Registered Agent
- Step 3. Appoint Board Members and Officers
- Step 4. File Articles of Incorporation
- Step 5. Apply for EIN
- Step 6. Draft Bylaws and Policy
- Step 7. Hold an Organizational Meeting
- Step 8. Obtain Licenses and Permits
- Step 9. Register for North Dakota State Taxation
- Step 10. Register for Charitable Solicitation
- Fee Schedule for Starting a North Dakota Nonprofit Corporation
- Apply for 501(c)(3) Tax-Exempt Status
- Ongoing Compliance
- FAQs
What is a Nonprofit Corporation
A Nonprofit Corporation is a legal entity organized and operated for purposes other than profit-making. The primary goal of a Nonprofit Corporation is to serve the public interest, promote a specific social cause, or support a charitable, religious, educational, scientific, or artistic mission. Unlike traditional for-profit corporations in North Dakota, Nonprofit Corporations do not distribute profits to shareholders or owners. Instead, surplus funds are reinvested into the organization to further its mission and objectives. When starting a nonprofit corporation, consult the best formation service in North Dakota to assist you.
Nonprofit Corporations are granted special tax-exempt status under Section 501(c) of the Internal Revenue Code in the United States, which exempts them from federal income taxes. Nonprofit Corporations may also be eligible for state and local tax exemptions. This tax-exempt status allows Nonprofits to receive tax-deductible donations and grants, making it easier for them to raise funds for their cause.
Some common types of Nonprofit Corporations include charities, foundations, social welfare organizations, trade associations, and religious institutions. These organizations play a vital role in society by addressing various social, environmental, and cultural issues, providing essential services, and enhancing the overall quality of life for communities.
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Steps to Form a North Dakota Nonprofit Corporation
Below is an extensive overview of the steps to initiate a nonprofit corporation in North Dakota:
Step 1. Choose a Name
The first step in starting a Nonprofit Corporation in North Dakota is choosing an appropriate name for your organization. The name must be unique and distinguishable from other businesses registered in the state. You can conduct a preliminary name search on the North Dakota Secretary of State‘s website to check the availability of your desired name. Additionally, the name should not include any prohibited words or phrases, such as “bank” or “insurance.”
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Step 2. Appoint North Dakota Registered Agent
When forming a Nonprofit Corporation in North Dakota, you must appoint Registered Agent in North Dakota. The Registered Agent is responsible for receiving legal documents and correspondence on behalf of your organization. They must have a physical address in North Dakota and be available during regular business hours. You can choose an individual or a professional Registered Agent service to serve in this role.
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Step 3. Appoint Board Members and Officers
In North Dakota, a Nonprofit Corporation must have at least three board members responsible for overseeing the management and operations of the organization. The board must also elect officers, such as a president, secretary, and treasurer. It is important to choose individuals who are passionate about your organization’s mission and have the skills to carry out their duties effectively.
Step 4. File Articles of Incorporation
To officially form a Nonprofit Corporation in North Dakota, you must file the Articles of Incorporation with the North Dakota Secretary of State. The filing fee is $100 for online and by mail filing. Your Articles of Incorporation must include the following required provisions:
- Name of the Nonprofit Corporation
- Purpose of the organization
- A statement that the organization is a Nonprofit Public Benefit Corporation
- Name and address of the Registered Agent
- Statement of how the organization’s assets will be distributed upon dissolution
Optional provisions that can be included in the Articles of Incorporation are specific limitations or restrictions on the organization’s activities, indemnification of directors and officers, and any additional information that may be relevant to the organization.
Step 5. Apply for EIN
After filing your Articles of Incorporation, you must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This nine-digit number is used to identify your organization for tax purposes and is required when applying for tax-exempt status or opening a bank account. You can apply for an EIN online, by fax, or by mail.
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Step 6. Draft Bylaws and Policy
Bylaws are the internal rules and procedures that govern the operation of your Nonprofit Corporation. They should outline the roles and responsibilities of board members and officers and the process for holding meetings and making decisions. Additionally, your organization should adopt a conflict of interest policy to properly address potential conflicts involving board members or officers.
Step 7. Hold an Organizational Meeting
Once you have drafted your bylaws and conflict of interest policy, you should hold an organizational meeting with your board members and officers. During this meeting, you will adopt the bylaws and conflict of interest policy, elect officers, and make any other initial decisions necessary for the operation of your Nonprofit Corporation.
Step 8. Obtain Licenses and Permits
Depending on the nature of your organization, you may be required to obtain business licenses and permits in North Dakota to operate legally. This can include local business licenses, zoning permits, and any specific licenses required for your organization’s activities. Consult your North Dakota Secretary of State for more information.
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Step 9. Register for North Dakota State Taxation
While many Nonprofit Corporations are exempt from federal income tax, they may still be subject to North Dakota state taxes. You must register with the North Dakota Office of State Tax Commissioner and may be required to file annual tax returns.
Step 10. Register for Charitable Solicitation
If your Nonprofit Corporation plans to solicit donations from the public, you must register with the North Dakota Office of the Attorney General. This registration is required before legally soliciting charitable contributions in North Dakota.
Fee Schedule for Starting a North Dakota Nonprofit Corporation
Here are the fees associated when starting a corporation in North Dakota:
- Articles of Incorporation Filing Fee: $100 for online and by mail filing
- Employer Identification Number (EIN) Application: Free
- Form 1023 (Application for Recognition of Exemption) User Fee: $600 (for most organizations)
- Form 1023-EZ (Streamlined Application for Recognition of Exemption) User Fee: $275
- Statement of Information Filing Fee: $25 if domestic, $40 if foreign
Please note that these fees are subject to change, and additional fees may be applicable depending on the specific requirements of your nonprofit organization, such as obtaining licenses and permits. Always consult the respective agency websites and experts for the most up-to-date information.
Apply for 501(c)(3) Tax-Exempt Status
Once you have successfully formed your North Dakota Nonprofit Corporation, the next crucial step is to apply for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. This status allows your organization to be exempt from federal income taxes and is essential for receiving tax-deductible donations and grants.
- Prepare IRS Form 1023 or 1023-EZ: The first step in applying for 501(c)(3) tax-exempt status is selecting the correct application form. Most organizations will use IRS Form 1023, the Application for Recognition of Exemption. However, smaller organizations may be eligible to use the shorter Form 1023-EZ. This streamlined application is only available to organizations with annual gross receipts of $50,000 or less and total assets of $250,000 or less. Review the eligibility requirements on the IRS website to determine which form is most appropriate for your Nonprofit Corporation in North Dakota.
- Submit the Application: After completing the appropriate application form, submit it with the required user fee to the IRS. The fee will depend on your organization’s size and financial status, so consult the IRS website for the most up-to-date information.Keep in mind that the IRS review process can take several months. During this time, maintain good records and continue to operate your North Dakota Nonprofit Corporation in compliance with state and federal regulations. If your application is approved, you will receive a Determination Letter from the IRS confirming your tax-exempt status.
North Dakota State Tax Exemption
In addition to federal tax exemption, your North Dakota Nonprofit Corporation may also qualify for state tax exemption. To apply, submit Form Form ST-101, Exemption Application, to the North Dakota Office of State Tax Commissioner and the required supporting documentation. If approved, your organization will be exempt from North Dakota state income tax and may qualify for exemption from other state taxes.
Ongoing Compliance
After successfully forming your North Dakota Nonprofit Corporation and obtaining tax-exempt status, it’s essential to maintain compliance with state and federal regulations. This includes filing annual reports, paying state and federal taxes, and maintaining good records.
- File Annual Reports: Your North Dakota Nonprofit Corporation must file an annual report with the North Dakota Secretary of State each year. This report, known as the Statement of Information, is due yearly within a specific time frame based on your organization’s registration date. Failure to file the report on time may result in penalties and suspending your organization’s corporate status.
- State Taxes: Even with tax-exempt status, your North Dakota Nonprofit Corporation may still be responsible for certain state taxes, such as sales tax permits on goods and services sold by your organization. Consult the North Dakota Office of State Tax Commissioner’s website for more information on state tax requirements.
- Federal Taxes: While your organization may be exempt from federal income tax, you must still file an annual information return with the IRS. This is typically Form 990, 990-EZ, or 990-N, depending on your organization’s size and financial activity. Consult the IRS website for more information on which form your North Dakota Nonprofit Corporation should file.
- Maintain Good Records: Keeping accurate and up-to-date records is essential for maintaining your Nonprofit Corporation’s compliance with state and federal regulations. This includes financial records, meeting minutes, and other organizational documents. Strong recordkeeping practices will help you stay compliant and provide a solid foundation for your organization’s growth and success.
FAQs
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Why You Should Start North Dakota Nonprofit
Why You Should Start a North Dakota Nonprofit
North Dakota, with its vast lands and close-knit communities, is a state like no other. Surrounded by breathtaking beauty and a resilient spirit, this region offers a unique environment where individuals can make a real difference. One way to contribute and positively impact the lives of others is by starting a nonprofit organization in North Dakota.
Nonprofits play a vital role in society, addressing a wide range of social, cultural, environmental, and educational issues. By creating a nonprofit, you have the power to champion a cause you deeply believe in, rally the community, and inspire meaningful change. Starting a nonprofit in North Dakota not only benefits those in need but also offers personal fulfillment like no other.
First and foremost, establishing a nonprofit organization allows you to give back to your community in a way that aligns with your values and personal mission. Are you passionate about improving access to education in underserved areas? Or, perhaps, saving endangered wildlife in the state’s nature reserves? By creating a nonprofit, you ensure that your efforts are focused, making a genuine impact on the issues that matter most to you.
Moreover, founding a nonprofit in North Dakota enables you to engage and mobilize the community. The people of this state are known for their exceptional sense of unity, resilience, and willingness to lend a helping hand. By building relationships, collaborating with local businesses, schools, and individuals, you can galvanize support and work collectively towards a common goal.
Starting a nonprofit also provides an opportunity for personal growth and development. The journey of building and leading an organization will challenge you in numerous ways, leading to personal transformation and the acquisition of new skills. From board management and strategic planning to fundraising and public speaking, you will broaden your horizons and develop capabilities that will positively impact not only your nonprofit but also your professional endeavors.
North Dakota’s supportive environment is also conducive to the success of your nonprofit. The state boasts a vast network of foundations, philanthropists, and organizations dedicated to bolstering the work of nonprofits. Commitment to creating an enabling environment for nonprofits has attracted generous funding opportunities, resources, and partnerships, making your journey as a nonprofit founder much smoother and more fruitful.
As the economy rebounds from the global pandemic, starting a nonprofit in North Dakota offers a unique chance to contribute to the state’s recovery and ensure that the most vulnerable members of society are not left behind. Many individuals have experienced severe setbacks, and your nonprofit can extend a helping hand, providing necessary support, resources, and hope.
Additionally, starting a nonprofit grants you the ability to leave a lasting legacy. By creating an efficient, impactful, and sustainable organization, you create a pathway for generational change. Your work will continue to positively affect the lives of North Dakotans long after you’re gone, shaping a future where those in need are not overlooked but prioritized and uplifted.
In conclusion, starting a nonprofit organization in North Dakota offers an incredible opportunity to forge positive change in your community. From championing a cause you deeply care about to engaging the community and contributing to personal growth, the benefits are immeasurable. The resilient spirit of this state coupled with its supportive ecosystem adequately primes and empowers individuals to have a lasting impact on their surroundings. So, why not embark on this challenging yet fulfilling journey and shape the brighter future that North Dakota truly deserves?
Note: This editorial comment does not contain specific data or statistics, as per the given instructions.
Conclusion
Forming a North Dakota Nonprofit Corporation and maintaining compliance with state and federal regulations are crucial to creating a successful organization. By ensuring your organization remains compliant, you can focus on fulfilling your mission and serving your community without worrying about legal or financial setbacks.
While this guide provides an overview of forming a Nonprofit Corporation in North Dakota, it’s important to remember that each organization’s situation is unique. The process of starting a for-profit corporation is different from a nonprofit corporation. Seek the advice of experienced professionals, such as attorneys, accountants, or nonprofit consultants, to ensure your organization is set up for success from the start. Check LLCBase for more guides and resources for starting your business.