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

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How to Start a Nonprofit Corporation in Washington

Are you passionate about making a difference in your community? Starting a nonprofit organization in Washington 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 Washington 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 Washington, 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 Washington 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 Washington Nonprofit Corporation

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

Step 1. Choose a Name

The first step in starting a Nonprofit Corporation in Washington 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 Washington 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 Washington Registered Agent

When forming a Nonprofit Corporation in Washington, you must appoint Registered Agent in Washington. The Registered Agent is responsible for receiving legal documents and correspondence on behalf of your organization. They must have a physical address in Washington 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 Washington, 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 Washington, you must file the Articles of Incorporation with the Washington Secretary of State. The filing fee is $180 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 Washington to operate legally. This can include local business licenses, zoning permits, and any specific licenses required for your organization’s activities. Consult your Washington Secretary of State for more information.

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Step 9. Register for Washington State Taxation

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

Fee Schedule for Starting a Washington Nonprofit Corporation

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

  • Articles of Incorporation Filing Fee: $180 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: $30 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 Washington 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 Washington.
  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 Washington 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.
Washington State Tax Exemption

In addition to federal tax exemption, your Washington Nonprofit Corporation may also qualify for state tax exemption. To apply, submit Form Form REV 27 0042, Exemption Application, to the Washington State Department of Revenue and the required supporting documentation. If approved, your organization will be exempt from Washington state income tax and may qualify for exemption from other state taxes.

Ongoing Compliance

After successfully forming your Washington 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 Washington Nonprofit Corporation must file an annual report with the Washington 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 Washington 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 Washington State 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 Washington 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 operates exclusively for a civic, charitable, educational, religious, or scientific purpose.
Can anyone start a nonprofit corporation in Washington?
Yes, as long as the purpose of the nonprofit qualifies under state law.
What are the benefits of starting a nonprofit corporation in Washington?
Some of the benefits include tax-exempt status, access to grants and donations, and limited liability for the organization’s directors and officers.
How do I choose a name for my nonprofit corporation in Washington?
The name of the corporation must be unique and not too similar to any other entity registered in the state. You can check the availability of a name with a search on the Washington Secretary of State’s website.
Do I need to register my nonprofit corporation with the state of Washington?
Yes, you will need to file Articles of Incorporation with the Washington Secretary of State’s office.
What information do I need to file the Articles of Incorporation in Washington?
You will need to provide the name of the nonprofit, the purpose of the nonprofit, the names and addresses of the directors, and a registered agent.
What is a registered agent?
A registered agent is the person or entity that is authorized to receive legal documents on behalf of the nonprofit.
Do I need to have a Board of Directors for my nonprofit corporation in Washington?
Yes, you will need to have at least three directors for your nonprofit corporation in Washington.
Can I have just one person serve as both the nonprofit’s director and registered agent in Washington?
Yes, you can serve as both the registered agent and a director, but at least one additional director is required.
What’s the difference between a director and an officer in a nonprofit corporation in Washington?
Directors are responsible for governing the organization and setting policies, while officers are responsible for day-to-day operations and management.
Do I need to provide financial or accounting records when filing the Articles of Incorporation in Washington?
No, you are not required to provide any financial or accounting records when filing the Articles of Incorporation.
What is the filing fee for the Articles of Incorporation in Washington?
The filing fee for the Articles of Incorporation in Washington is $30.
How long does it take for the Articles of Incorporation to be filed and approved in Washington?
Generally, the Washington Secretary of State’s office processes filings within 5-7 business days.
Will I need to file for a tax-exempt status for my nonprofit corporation in Washington?
Yes, you will need to file for a tax-exempt status with the Internal Revenue Service (IRS) to become tax exempt.
What type of tax-exempt status should I apply for in Washington?
It depends on the type of organization and your specific tax-exempt needs. Ask your attorney or accountant to determine the right status for your nonprofit.
How long does it take to obtain tax-exempt status from the IRS in Washington?
It can take several months to more than one year to obtain tax-exempt status from the IRS.
Can I conduct fundraising activities for my nonprofit corporation in Washington before obtaining tax-exempt status?
Yes, you can conduct fundraising activities, but you must disclose that donations are not currently tax-deductible.
Are there any annual requirements for my nonprofit corporation in Washington?
Yes, every Washington nonprofit corporation must file an Annual Report with the Washington Secretary of State’s office.
Can I change the purpose of my nonprofit corporation at a later date in Washington?
Yes, you can change the purpose of your nonprofit corporation, but you must obtain approval from the board of directors, and you may need to file amended Articles of Incorporation.
Is it possible to reinstate a nonprofit corporation that has been suspended in Washington?
Yes, you can file a reinstatement application with the Washington Secretary of State’s office.
Can a nonprofit corporation in Washington be dissolved?
Yes, a nonprofit can be dissolved voluntarily if the board of directors approves, or involuntarily if it fails to file Annual Reports and pay fees.
What happens to the assets of a dissolved nonprofit corporation in Washington?
The assets of a dissolved nonprofit corporation must be distributed to another tax-exempt nonprofit or government entity.
Can a nonprofit corporation in Washington be sued?
Yes, a nonprofit corporation can be sued just like any other entity.
Do I need a business license for my nonprofit corporation in Washington?
It depends on the activities of the nonprofit. Some activities may require a business license or permit.
Can I convert a for-profit corporation to a nonprofit corporation in Washington?
Yes, you can convert a for-profit corporation to a nonprofit corporation, but you will need to comply with state and federal regulations.
Is it possible to obtain expedited processing for filings with the Washington Secretary of State’s office?
Yes, the Washington Secretary of State’s office offers Expedited Processing for an additional fee.
Can I file the Articles of Incorporation online in Washington?
Yes, you can file the Articles of Incorporation online through the Washington Secretary of State’s website.
Can I reserve a name for my nonprofit corporation before filing the Articles of Incorporation in Washington?
Yes, you can reserve a name for your nonprofit corporation for 180 days through the Washington Secretary of State’s website.
What is a nonprofit corporation in Washington?
A nonprofit corporation in Washington is an organization that operates for the benefit of a charitable or public purpose, and not to generate profits for its owners or shareholders.
How do I start a nonprofit corporation in Washington?
To start a nonprofit corporation in Washington, you must file articles of incorporation with the Secretary of State’s office and obtain tax-exempt status from the IRS.
What are the filing fees for starting a nonprofit corporation in Washington?
The filing fee for articles of incorporation in Washington is $30.
What is the purpose of registering a nonprofit corporation in Washington?
Registering a nonprofit corporation in Washington helps establish the organization as a legal entity and provides tax benefits for donors and the organization.
What is the process for obtaining tax-exempt status as a nonprofit corporation in Washington?
The process for obtaining tax-exempt status as a nonprofit corporation in Washington requires filing a Form 1023 or 1023-EZ with the IRS.
How long does it take to establish a nonprofit corporation in Washington?
It typically takes 5-10 business days to receive confirmation from the Washington Secretary of State that your nonprofit corporation has been registered.
How many directors does a nonprofit corporation in Washington need to have?
A nonprofit corporation in Washington must have at least three directors.
What types of nonprofit corporations are recognized in Washington?
Washington recognizes several types of nonprofit corporations, including the 501(c)(3) and 501(c)(4) tax-exempt classifications.
What is the minimum size of a nonprofit corporation board of directors allowed in Washington?
The minimum size of a nonprofit corporation board of directors allowed in Washington is three.
What is required for a nonprofit corporation in Washington to maintain its 501(c)(3) tax exemption status?
To maintain its 501(c)(3) tax exemption status, a nonprofit corporation in Washington must operate exclusively for charitable or educational purposes and not engage in certain political activities.
How often do nonprofits in Washington need to file reports with the state?
Nonprofits in Washington must file an annual report with the Secretary of State each year.
What is the fee for filing an annual report for a nonprofit corporation in Washington?
The fee for filing an annual report for a nonprofit corporation in Washington is $10.
Can a Washington nonprofit corporation be considered a charitable organization for tax purposes?
Yes, a Washington nonprofit corporation can be considered a charitable organization for tax purposes if it declares itself as a 501(c)(3) organization.
What are some examples of 501(c)(3) organizations in Washington?
Some examples of 501(c)(3) organizations in Washington include food banks, animal shelters, and educational institutions.
What is the role of a registered agent for a nonprofit corporation in Washington?
A registered agent for a nonprofit corporation in Washington is responsible for receiving legal documents on behalf of the organization and forwarding them to the appropriate person or party.
Can a nonprofit corporation in Washington change its name?
Yes, a nonprofit corporation in Washington can change its name by filing an amendment to its articles of incorporation with the Secretary of State’s office.
How does a nonprofit corporation in Washington dissolve?
To dissolve a nonprofit corporation in Washington, the organization must file articles of dissolution with the Secretary of State’s office, pay its debts, and distribute its remaining funds to other nonprofits or to the government.
Are there specific rules for running a nonprofit corporation in Washington?
Yes, there are specific rules for running a nonprofit corporation in Washington, including adhering to its bylaws, maintaining its tax-exempt status, and following the state’s nonprofit corporation laws.
Can a Washington-based nonprofit organization receive charitable donations from other states?
Yes, a Washington-based nonprofit organization can receive charitable donations from other states as long as it is recognized as a legitimate tax-exempt organization by the IRS.
Do nonprofit corporations in Washington have to pay state sales tax?
Most nonprofit corporations in Washington are exempt from paying state sales tax if they meet certain criteria.
What is a conflict of interest policy for nonprofit corporations in Washington?
A conflict of interest policy for nonprofit corporations in Washington requires board members to disclose any conflicts and to abstain from voting on any issues where they have a potential conflict of interest.
Can a nonprofit corporation in Washington operate for-profit businesses?
Yes, a nonprofit corporation in Washington can operate for-profit businesses as long as they further the organization’s charitable mission and goals.
Can a nonprofit corporation in Washington engage in lobbying activities?
Yes, a nonprofit corporation in Washington can engage in lobbying activities as long as they do not constitute a “substantial” portion of the organization’s activities.
Can a nonprofit corporation in Washington contribute to political campaigns?
Most nonprofit corporations in Washington are prohibited from contributing to political campaigns or participating in other partisan activities.
Can a Washington nonprofit corporation internationalize?
Yes, a Washington nonprofit corporation can internationalize by working with partners overseas, applying for international grants, and collaborating with international aid organizations.
Can a nonprofit corporation in Washington compete with for-profit businesses?
A nonprofit corporation in Washington can compete with for-profit businesses if the competition furthers its charitable objectives.
Do nonprofit corporations in Washington have to disclose their financial information?
Yes, nonprofit corporations in Washington must provide certain financial information to the public, including their annual tax returns.

Also Read

Why You Should Start Washington Nonprofit

One of the key reasons why you should start a nonprofit in Washington is because it allows you to fill a gap that you see in your community. Whether it’s providing mentorship programs for at-risk youth, offering support to those struggling with mental health issues, or advocating for environmental conservation, nonprofits have the power to address issues that may not be adequately addressed by the government or for-profit organizations. By starting your own nonprofit, you have the opportunity to create positive change in your community and make a meaningful impact on the lives of others.

Moreover, starting a nonprofit in Washington allows you to work towards a cause that you are truly passionate about. Many people feel a strong sense of purpose when they are able to dedicate themselves to a cause that is meaningful to them. Whether you are passionate about social justice, animal welfare, education, or healthcare, starting a nonprofit provides you with the platform to pursue your passion and make a difference in the lives of others.

Furthermore, starting a nonprofit in Washington allows you to create a sense of community and belonging. Nonprofits have the power to bring people together who share a common goal or vision. By building a community of like-minded individuals who are committed to making a positive impact, you can create a network of support and collaboration that will strengthen your organization and its impact.

Additionally, starting a nonprofit in Washington can be a rewarding and fulfilling experience. While starting and running a nonprofit may come with its challenges, the sense of fulfillment that comes from knowing that you are contributing to the common good and making a difference in the lives of others is unparalleled. Being able to see the impact of your work firsthand and knowing that you are making a difference in the world is a truly rewarding experience that can be incredibly fulfilling.

Overall, starting a nonprofit in Washington is a powerful way to make a positive impact in your community, work towards a cause that you are passionate about, build a sense of community and belonging, and experience the fulfillment that comes from knowing that you are making a difference in the world. If you have a vision for positive change and are ready to take action, starting a nonprofit in Washington may be the perfect way to bring that vision to life.

Conclusion

Forming a Washington 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 Washington, 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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