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

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How to Start a Nonprofit Corporation in South Dakota

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

Start a Nonprofit Corporation

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 South 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 South 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 South Dakota Nonprofit Corporation

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

Step 1. Choose a Name

The first step in starting a Nonprofit Corporation in South 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 South 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 South Dakota Registered Agent

When forming a Nonprofit Corporation in South Dakota, you must appoint Registered Agent in South Dakota. The Registered Agent is responsible for receiving legal documents and correspondence on behalf of your organization. They must have a physical address in South 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 South 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 South Dakota, you must file the Articles of Incorporation with the South Dakota Secretary of State. The filing fee is $150 for online filing, and $165 for filing by mail.. 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 South Dakota to operate legally. This can include local business licenses, zoning permits, and any specific licenses required for your organization’s activities. Consult your South Dakota Secretary of State for more information.

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Step 9. Register for South Dakota State Taxation

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

Fee Schedule for Starting a South Dakota Nonprofit Corporation

Here are the fees associated when starting a corporation in South Dakota:

  • Articles of Incorporation Filing Fee: $150 for online filing, and $165 for filing by mail.
  • 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: $10 if domestic, $50 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 South 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.

  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 South Dakota.
  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 South 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.
South Dakota State Tax Exemption

In addition to federal tax exemption, your South Dakota Nonprofit Corporation may also qualify for state tax exemption. To apply, submit Form Form ST-14, Exemption Application, to the South Dakota Department of Revenue and the required supporting documentation. If approved, your organization will be exempt from South Dakota state income tax and may qualify for exemption from other state taxes.

Ongoing Compliance

After successfully forming your South 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 South Dakota Nonprofit Corporation must file an annual report with the South 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 South 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 South Dakota Department of Revenue’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 South 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

What are the requirements for incorporating a nonprofit in South Dakota?
To incorporate a nonprofit in South Dakota, you’ll need to choose a name, file articles of incorporation, and obtain tax-exempt status from the IRS.
What types of nonprofits can be formed in South Dakota?
Any type of tax-exempt nonprofit can be formed in South Dakota, including charities, cultural organizations, educational nonprofits, and religious organizations.
How do I choose a name for my nonprofit in South Dakota?
Your nonprofit’s name must be unique and distinguishable from other corporate names on file with the South Dakota Secretary of State.
Can my nonprofit have the same name as an existing business in South Dakota?
No, your nonprofit must have a unique name in South Dakota and cannot have the same name as an existing business.
What should I include in my nonprofit’s articles of incorporation in South Dakota?
Your articles of incorporation should include your nonprofit’s purpose, registered agent, board of directors, and initial filing fee.
How much does it cost to file articles of incorporation for a nonprofit in South Dakota?
The filing fee for nonprofit articles of incorporation in South Dakota is $30.
What is a registered agent for a nonprofit in South Dakota?
A registered agent is a person or entity authorized to receive legal correspondence and documents on behalf of a nonprofit in South Dakota.
Who can serve as a registered agent for a nonprofit in South Dakota?
Any resident or business entity authorized to transact business in South Dakota can serve as a registered agent for a nonprofit.
Does my nonprofit need to obtain tax-exempt status from the IRS to operate in South Dakota?
It’s highly recommended to obtain tax-exempt status from the IRS to qualify for tax exemptions and to be recognized as a 501(c)(3) organization in South Dakota.
How long does it take for my nonprofit to obtain tax-exempt status from the IRS in South Dakota?
The process to obtain tax-exempt status from the IRS may take several months in South Dakota.
Can my nonprofit get funded by the government in South Dakota?
Nonprofits in South Dakota may be eligible for government grants and contacts if they meet certain requirements and qualifications.
Does my nonprofit need to register for state taxes in South Dakota?
Nonprofits in South Dakota are exempt from state taxes unless they have tangible personal property or engage in business activities that are subject to tax.
Can I start a nonprofit on my own in South Dakota or do I need help?
It’s recommended to seek professional guidance when starting a nonprofit in South Dakota, as the process can be complex.
Can individuals with a criminal record be involved in starting a nonprofit in South Dakota?
Individuals with a criminal record may still be able to start a nonprofit in South Dakota, depending on the severity and nature of their conviction.
Can my nonprofit pay its employees in South Dakota?
Yes, nonprofits in South Dakota can pay their employees, but salaries must be reasonable and proportionate to the work performed.
How can I advertise my nonprofit in South Dakota?
Nonprofits in South Dakota can advertise through social media, word of mouth, events, and more.
Are there any funding resources available to established nonprofits in South Dakota?
Yes, grants and funding resources are available for established nonprofits in South Dakota.
Can nonprofits hold fundraisers in South Dakota?
Yes, nonprofits in South Dakota can hold fundraising events and campaigns to raise money.
Can my nonprofit use volunteers in South Dakota?
Yes, nonprofits in South Dakota can use volunteers, but must adhere to certain guidelines and laws.
Can nonprofits engage in lobbying activities in South Dakota?
Yes, but there are limitations on the level of lobbying activities that a nonprofit can engage in without jeopardizing their tax-exempt status in South Dakota.
What happens if my nonprofit does not comply with South Dakota laws and regulations?
Noncompliance with South Dakota’s nonprofit laws and regulations may result in fines or revocation of tax-exempt status.
What are the annual filing requirements for nonprofits in South Dakota?
Nonprofits registered in South Dakota need to file an annual report with the Secretary of State and may need to file certain federal tax forms.
How can my nonprofit obtain liability insurance in South Dakota?
Nonprofits can obtain liability insurance from insurance providers in South Dakota.
Can my nonprofit be sued in South Dakota?
Yes, nonprofits in South Dakota can be sued if they violate laws or regulations, harm individuals, or engage in illegal activities.
Can my nonprofit merge with another nonprofit in South Dakota?
Yes, nonprofits can merge with another nonprofit in South Dakota under certain circumstances and by following specific procedures.
Can I get pro bono legal assistance for my nonprofit in South Dakota?
Yes, there are several organizations in South Dakota that offer pro bono legal assistance to nonprofits.
Can my nonprofit receive donations from out-of-state donors in South Dakota?
Yes, nonprofits in South Dakota can receive donations from out-of-state donors, but may need to adhere to certain laws and regulations.
How can my nonprofit access fundraising resources in South Dakota?
Nonprofits in South Dakota can access fundraising resources through grants, sponsorships, and crowdfunding platforms.
What is a nonprofit Corporation in South Dakota?
A nonprofit corporation in South Dakota is a business entity that operates without the purpose of generating a profit but rather serves educational, scientific, religious or other charitable endeavors.
Why should I start a nonprofit corporation in South Dakota?
Starting a South Dakota nonprofit corporation can provide significant tax exemptions, ability to solicit tax-deductible donations and limited personal liability from creditors.
What are the steps involved in starting a nonprofit corporation in South Dakota?
You need to prepare and file the Articles of Incorporation, draft bylaws, form a board of directors, elect officers, obtain licenses and permits, and apply for tax-exempt status.
Can I start a nonprofit corporation in South Dakota alone?
No, you need at least one other person to incorportae nonprofit in South Dakota.
Do I need to provide proof of compliance to South Dakota laws?
Yes. You may have to submit a Certificate of Good Standing or Equivalent documentation that every Board member must sign.
Is there a lawyer needed to start a nonprofit corporation in South Dakota?
Not necessarily but it is recommended to get legal advice and assistance from an attorney in order to make sure the incorporation process is done correctly.
Are there any special requirements for the Board of Directors of a nonprofit in South Dakota?
Yes, the Board of Directors consists of at least three members in South Dakota.
Can a corporation organization change its mission in South Dakota?
Yes. However, you need a majority of them to vote positively in a meeting so that it complies with the State’s Incorporation laws and regulations.
Can directors be fired in a nonprofit in South Dakota?
Yes, however, only the members of the corporation have the authority to recall or fire a board of director member.
Can I raise money with fundraising on my nonprofit organization in South Dakota?
Yes, but this is dependent upon receiving of your sought Exemption status or you need to have extantely followed all Charitable state requirements for fundraising.
Does South Dakota allow tax exempt on donations?
Yes, if you have received 501(c)(3).
Does a nonprofit organization require legal documents in South Dakota?
Yes, Articles of Incorporation and Bylaws.
Can I produce a yield with a non-profit in South Dakota?
No, the purpose of the charity is not generating profit.
Can I sell my nonprofit organization in South Dakota?
No, organizations cannot sell themselves.
How much does it cost to file for formation of a nonprofit corporation in South Dakota?
A filing fee of $10 or orignal cost should go with paid professionals to file.
Do all nonprofit organizations qualify for tax-exempt status in South Dakota?
No, Not every nonprofit organization qualifies for tax-exempt status; only organizations that fulfill the requirements set by the laws of South Dakota are eligible for exemption.
Might directors be remunerated for the time and effort that they put in as unpaid volunteers in a nonprofit corporation in South Dakota?
Usually, directors are volunteer and are not paid, but reasonably they are entitled to reimbursement for specific expenses.
How long does it take to form a nonprofit corporation in South Dakota?
The actual time depends on the time it takes for the Secretary of State to process your application, but it may take a few business days.
Do nonprofit organizations seeking tax-exempt status get resubmission benefits in South Dakota?
Yes, if your South Dakota nonprofit organization files an appellation with the Colorado Taxation Division, and it denies findings then Nonprofits even can reapply.
What is South Dakota nonprofit formation is exempt from sales taxes?
Nonprofits based in South Dakota are allowed for exemption from sales/use along with the purchase of tangible personal necessary property for your mission.
Where can I acquire nonprofit legal forms online inception form in South Dakota?
You may obtain nonprofit legal forms from attorneys, individual investors, or operating sites.
Do I need bylaws for my nonprofit corporation in South Dakota?
Yes, all South Dakota nonprofit corporations should always include distinct and distinct Bylaws.
Is the state fee required for nonprofits in South Dakota?
Yes, there is an acceptance fee required when submitting Articles of Incorporation for consideration.
What are the annual filing fees of a South Dakota nonprofit corporation?
Annual around ten dollars to renew your Secretary of State identification.
What is the difference between a South Dakota for-profit and a South Dakota nonprofit corporation?
A nonprofit corporation does not make profits or distributes payment to owners, but suitable converted savings must be being remitted to their determinate objectives; for-profit organizations intent exists or exists to make developments from forking profit to be distributing to owners.
Might state and federal refuse-to-renew involvement after incorporation?
South Dakota state or Federal treats high importance as an NON tax-deductible corp.
Can individuals who support nonprofits receiving exemptions from donations taxes be given a refund?
You might not provide profit or wrongdoing in such benefits, and at the voter profile must be securely authorized in South Dakota.
Are annual financial reports possible for assuring state funds administrations to nonprofit corporations in South Dakota?
It guarantees and best practice to annually share financial reports for Secetary of state approval.

Also Read

Why You Should Start South Dakota Nonprofit

One of the most compelling reasons to start a nonprofit in South Dakota is the opportunity to address a cause or issue that you are passionate about. Whether it’s environmental conservation, education, or healthcare, starting a nonprofit allows you to focus your energy and resources on a cause that you truly believe in. By starting a nonprofit, you can leverage your skills, talents, and knowledge to make a positive impact in your community in a way that aligns with your values and principles.

Additionally, starting a nonprofit can provide you with a sense of purpose and fulfillment that may be missing from other aspects of your life. Many individuals find that by starting a nonprofit, they are able to channel their desire to help others into concrete actions that can lead to real, tangible change. Knowing that you are making a difference in the lives of others can bring a sense of satisfaction and meaning that is unparalleled.

Another reason to start a nonprofit in South Dakota is the opportunity to build a strong sense of community and connection with others who share your passion for a particular cause. By working together with other like-minded individuals, you can create a collective impact that is greater than the sum of its parts. Through collaboration and partnership, you can make a bigger difference than you ever could on your own.

Furthermore, starting a nonprofit in South Dakota can be an opportunity for personal and professional growth. As the leader of a nonprofit organization, you will have the chance to develop new skills, such as fundraising, strategic planning, and program development. You will also have the opportunity to expand your network and connect with a diverse group of individuals who can support and guide you on your journey.

In conclusion, starting a nonprofit in South Dakota can be a rewarding and fulfilling experience that allows you to make a real and lasting impact on the world around you. By focusing your energy and resources on a cause that you are passionate about, you can build a strong sense of community, connection, purpose, and personal growth that can enrich your life in ways you never imagined. So why wait? Start your South Dakota nonprofit today and begin making a difference in the world.

Conclusion

Forming a South 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 South 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.

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