Starting a Nonprofit Corporation in Ohio 2024: Your Step-by-Step Guide

How to Start a Nonprofit Corporation in Ohio

Are you passionate about making a difference in your community? Starting a nonprofit organization in Ohio 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 Ohio 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.

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 Ohio, 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 Ohio 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 Ohio Nonprofit Corporation

Below is an extensive overview of the steps to initiate a nonprofit corporation in Ohio:

Step 1. Choose a Name

The first step in starting a Nonprofit Corporation in Ohio 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 Ohio 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 Ohio Statutory Agent

When forming a Nonprofit Corporation in Ohio, you must appoint Statutory Agent in Ohio. The Statutory Agent is responsible for receiving legal documents and correspondence on behalf of your organization. They must have a physical address in Ohio and be available during regular business hours. You can choose an individual or a professional Statutory Agent service to serve in this role.

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Step 3. Appoint Board Members and Officers

In Ohio, 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 Ohio, you must file the Articles of Incorporation with the Ohio Secretary of State. The filing fee is $99 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 Statutory 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 Ohio 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 Ohio State Taxation

While many Nonprofit Corporations are exempt from federal income tax, they may still be subject to Ohio state taxes. You must register with the Ohio Department of Taxation 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 Ohio Attorney General’s Office. This registration is required before legally soliciting charitable contributions in Ohio.

Fee Schedule for Starting a Ohio Nonprofit Corporation

Here are the fees associated when starting a corporation in Ohio:

  • Articles of Incorporation Filing Fee: $99 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: $99 if domestic, $99 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 Ohio 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.

  1. 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 Ohio.
  2. 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 Ohio 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.
Ohio State Tax Exemption

In addition to federal tax exemption, your Ohio Nonprofit Corporation may also qualify for state tax exemption. To apply, submit Form Form STEC B, Exemption Application, to the Ohio Department of Taxation and the required supporting documentation. If approved, your organization will be exempt from Ohio state income tax and may qualify for exemption from other state taxes.

Ongoing Compliance

After successfully forming your Ohio 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 Ohio Nonprofit Corporation must file an annual report with the Ohio 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 Ohio 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 Ohio Department of Taxation’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 Ohio 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

What is a nonprofit corporation?
A nonprofit corporation is a legal entity that is organized and operated for a purpose other than generating a profit.
What paperwork do I need to file to start a nonprofit corporation in Ohio?
To start a nonprofit corporation in Ohio, you need to file Articles of Incorporation with the Ohio Secretary of State’s office.
How much does it cost to file Articles of Incorporation in Ohio?
It costs $125 to file Articles of Incorporation with the Ohio Secretary of State’s office.
How long does it take to form a nonprofit corporation in Ohio?
It typically takes around 21 business days to form a nonprofit corporation in Ohio.
What type of nonprofit corporation should I form in Ohio?
There are several types of nonprofit corporations in Ohio, including religious, educational, scientific, and charitable organizations.
What is the difference between a nonprofit corporation and a for-profit corporation in Ohio?
Nonprofit corporations are organized and operated for a purpose other than generating a profit, while for-profit corporations are primarily organized and operated to make money.
Do I need to have a board of directors to start a nonprofit corporation in Ohio?
Yes, you need to have a board of directors to start a nonprofit corporation in Ohio.
How many directors should be on the board of a nonprofit corporation in Ohio?
There isn’t a specific number of directors required in Ohio, but most nonprofits have at least three.
Do I need to have a registered agent to start a nonprofit corporation in Ohio?
Yes, you need to have a registered agent to start a nonprofit corporation in Ohio.
What is a registered agent?
A registered agent is a person or entity that is designated to receive legal notices and other formal documents on behalf of a corporation.
Can I be my own registered agent in Ohio?
Yes, you can be your own registered agent in Ohio if you have a physical street address in the state.
Does a nonprofit corporation in Ohio need to file annual reports?
Yes, nonprofit corporations in Ohio are required to file annual reports with the Ohio Secretary of State’s office.
What is Ohio’s sales tax exemption for nonprofit corporations?
In Ohio, nonprofit corporations are generally exempt from paying sales tax on purchases made for their exempt purposes.
What is Ohio’s personal property tax exemption for nonprofit corporations?
In Ohio, nonprofit corporations are generally exempt from paying personal property tax on property used for their exempt purposes.
Can a nonprofit corporation in Ohio pay its directors?
Yes, a nonprofit corporation in Ohio can pay its directors, but it must be reasonable and commensurate with the services performed.
Can a nonprofit corporation in Ohio engage in lobbying activities?
Yes, nonprofit corporations in Ohio can engage in lobbying activities, but they must follow certain rules and regulations.
What regulations are there for Ohio nonprofit corporations engaged in lobbying activities?
Ohio nonprofit corporations engaged in lobbying activities must register with the Ohio Secretary of State’s office and comply with reporting and disclosure requirements.
What is a charitable solicitation registration in Ohio?
A charitable solicitation registration is a registration that certain nonprofit corporations in Ohio must obtain in order to solicit donations from the public.
Do all nonprofit corporations in Ohio need a charitable solicitation registration?
No, only nonprofit corporations that solicit donations from the public need a charitable solicitation registration in Ohio.
Is there a fee to obtain a charitable solicitation registration in Ohio?
Yes, there is a fee to obtain a charitable solicitation registration in Ohio.
Can I start a nonprofit corporation in Ohio for political purposes?
No, nonprofit corporations in Ohio cannot be formed for political purposes.
Can a nonprofit corporation in Ohio endorse political candidates?
No, nonprofit corporations in Ohio cannot endorse political candidates.
Can a nonprofit corporation in Ohio engage in lobbying related to political candidates?
Yes, nonprofit corporations in Ohio can engage in lobbying related to political candidates, but they must follow certain rules and regulations.
What is the Ohio Attorney General’s office Charitable Law Section?
The Ohio Attorney General’s office Charitable Law Section is responsible for enforcing Ohio’s charitable solicitation laws.
Where can I find resources to help me start a nonprofit corporation in Ohio?
The Ohio Secretary of State’s office and the Ohio Attorney General’s office Charitable Law Section both provide helpful resources for starting a nonprofit corporation in Ohio.
Can I hire an attorney to start a nonprofit corporation in Ohio?
Yes, you can hire an attorney to help you start a nonprofit corporation in Ohio.
How do I dissolve a nonprofit corporation in Ohio?
To dissolve a nonprofit corporation in Ohio, you need to file articles of dissolution with the Ohio Secretary of State’s office.
Does a nonprofit corporation in Ohio need to file a tax return?
Yes, a nonprofit corporation in Ohio may need to file a tax return with the IRS and the Ohio Department of Taxation, depending on its activities and income.
What is the Ohio Uniform Unincorporated Nonprofit Association Act?
The Ohio Uniform Unincorporated Nonprofit Association Act is a law that provides a framework for unincorporated nonprofit associations in Ohio.
What are the requirements for incorporating a nonprofit corporation in Ohio?
To incorporate a nonprofit corporation in Ohio, you must file nonprofit articles of incorporation with the Ohio secretary of state.
What will the articles of incorporation include?
The articles of incorporation will include the name and purpose of your nonprofit corporation, the names and addresses of board members, and your nonprofit corporation’s registered agent in Ohio.
Who can serve as a registered agent for a nonprofit corporation in Ohio?
A registered agent for a nonprofit corporation in Ohio must be a resident of Ohio or a business entity authorized to conduct business in Ohio.
Can a nonprofit corporation in Ohio have one person as the board of directors?
Yes, in Ohio, a nonprofit corporation can have one person as the board of directors.
How many directors does an Ohio nonprofit corporation need?
Ohio law requires that a nonprofit corporation have at least three directors.
What are the annual reporting requirements for an Ohio nonprofit corporation?
Ohio nonprofit corporations must file an annual report with the Ohio secretary of state by the 15th day of the fifth month after the close of the organization’s fiscal year.
What information is required to be included in the annual report for an Ohio nonprofit corporation?
The annual report for an Ohio nonprofit corporation includes the name and address of the corporation, the name and address of the registered agent, and the names and addresses of officers and directors.
Is there a filing fee for the annual report for an Ohio nonprofit corporation?
Yes, there is a filing fee for the annual report for an Ohio nonprofit corporation.
What is the current filing fee for the annual report for an Ohio nonprofit corporation?
As of 2021, the current filing fee for the annual report for an Ohio nonprofit corporation is $25.
Do nonprofit corporations in Ohio have to pay federal taxes?
The general rule is that nonprofit corporations in Ohio are exempt from federal income taxes if they meet certain requirements.
What requirements must an Ohio nonprofit corporation meet to be exempt from federal income taxes?
Ohio nonprofit corporations must apply for tax-exempt status with the IRS and meet the requirements of the tax-exempt section under the Internal Revenue Code.
Can an Ohio nonprofit corporation apply for tax-exempt status retroactively?
Yes, Ohio nonprofit corporations can apply for tax-exempt status retroactively up to 27 months after the end of the organization’s fiscal year.
Is there a fee to apply for tax-exempt status for an Ohio nonprofit corporation?
Yes, there is a fee to apply for tax-exempt status for an Ohio nonprofit corporation.
What is the current filing fee for the IRS Form 1023 for an Ohio nonprofit corporation?
As of 2021, the current filing fee for the IRS Form 1023 for an Ohio nonprofit corporation is $600.
Is there a state tax exemption for Ohio nonprofit corporations?
Yes, Ohio nonprofit corporations may be eligible for state tax exemptions on sales, property, and income taxes.
Do nonprofit corporations in Ohio have to have physical offices or locations?
Nonprofit corporations in Ohio do not have to have physical offices or locations.
What is a 501(c)(3) nonprofit corporation in Ohio?
A 501(c)(3) nonprofit corporation in Ohio is a tax-exempt organization recognized under the Internal Revenue Code.
What are the benefits of being a 501(c)(3) nonprofit corporation in Ohio?
The benefits of being a 501(c)(3) nonprofit corporation in Ohio include exemption from federal income tax, access to grant opportunities, and more credibility with donors.
Are there any restrictions on the activities of nonprofit corporations in Ohio?
Yes, nonprofit corporations in Ohio are prohibited from engaging in excessive lobbying or political campaign activities.
What are the fundraising requirements for nonprofit corporations in Ohio?
Ohio nonprofit corporations must be registered with the Ohio attorney general’s office before soliciting donations or conducting charitable activity in Ohio.
Do Ohio nonprofit corporations have to have employees?
Ohio nonprofit corporations are not required to have employees.
Do Ohio nonprofit corporations have to have bylaws?
Yes, Ohio nonprofit corporations must have bylaws that describe the rules and procedures used by the organization.
Who can amend the bylaws of an Ohio nonprofit corporation?
The bylaws of an Ohio nonprofit corporation can be amended by the board of directors.
Can an Ohio nonprofit corporation dissolve or dissolve by mistake?
Yes, an Ohio nonprofit corporation can intentionally dissolve or may dissolve because of outside circumstances such as failure to comply with state laws and regulations.
What is the process for dissolving an Ohio nonprofit corporation?
The process for dissolving an Ohio nonprofit corporation includes filing articles of dissolution and distributing remaining assets to eligible recipients.
How can I find more information about starting an Ohio nonprofit corporation?
You can find more information about starting an Ohio nonprofit corporation by contacting the Ohio Secretary of State’s business services division.
Are there any organizations that provide assistance or resources for nonprofit corporations in Ohio?
Yes, organizations like the Ohio Association of Nonprofit Organizations or regional nonprofit-focused organizations can provide assistance or resources for nonprofit corporations in Ohio.

Also Read

Why You Should Start Ohio Nonprofit

One of the primary reasons why starting an Ohio nonprofit is such a fantastic idea is the ability to make a real difference in your community. Nonprofits are created with the purpose of addressing a specific social issue or cause, and by starting your own nonprofit, you have the opportunity to create positive change in the lives of those around you. Whether you are passionate about environmental conservation, animal welfare, education, or any other noble cause, establishing a nonprofit allows you to actively work towards improving society and making a lasting impact.

Moreover, forming a nonprofit allows you to mobilize like-minded individuals and create a strong network of supporters who share your vision and mission. Through collaboration and teamwork, nonprofits can leverage the skills, expertise, and resources of their members to amplify their impact and reach their goals more effectively. By bringing people together around a shared cause, nonprofits can foster a sense of community and belonging, inspiring individuals to work towards a common purpose and create positive change together.

Another compelling reason to start an Ohio nonprofit is the opportunity to access funding and resources to support your organization’s work. Nonprofits are eligible to apply for grants, donations, and other forms of financial support from various sources, including government agencies, foundations, corporations, and individual donors. These resources can help nonprofits cover their operational expenses, fund specific projects and initiatives, and grow their capacity to serve the community. By establishing a nonprofit, you can tap into these funding opportunities and secure the resources needed to make a meaningful difference in the world.

Additionally, starting a nonprofit allows you to build leadership and organizational skills that can benefit you both personally and professionally. As the founder of a nonprofit, you will need to develop a strategic vision, set goals and objectives, manage finances and operations, and oversee programming and services. This hands-on experience in running a nonprofit can help you hone your management and leadership abilities, boost your resume, and open up new opportunities for career advancement and personal growth.

Lastly, starting an Ohio nonprofit provides a platform for you to channel your passion, creativity, and energy into a meaningful and purposeful endeavor. By creating a nonprofit around a cause that you are passionate about, you can use your skills and talents to address pressing social issues, advocate for positive change, and make a lasting impact on the world. Nonprofits have the power to inspire and motivate individuals to come together, effect change, and create a more just, equitable, and sustainable society for all.

In conclusion, starting an Ohio nonprofit offers a multitude of benefits, from making a real difference in your community to accessing funding and resources to developing leadership skills and personal growth opportunities. If you are passionate about a particular cause and want to create positive change in the world, starting a nonprofit may be the perfect way to turn your vision into reality. So, why wait? Start your Ohio nonprofit today and begin your journey towards making a meaningful and lasting impact on the world.

Conclusion

Forming a Ohio 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 Ohio, 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.

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