Business Entity formation
Profit Entity
Non-profit organizations are as important as a profit-motive organization as they form an pertinent part in the welfare and growth of human society. They are a legal entity with the single motive of ensuring justice and equality in a society. They are widely present in the domain of arts, culture, science, sports, religion and for undertaking any other permitted activity without a profit motive. NPO’s are generally conceived by few group of people coming together for the promotion, support, growth or highlighting a common cause or concern which may have social ramifications.
Following are a few broad steps for starting a 501 c3 organization
Statement of mission.
It is essential to define in a prepare a statement of mission/purpose the very purpose of the organization, the philosophy or idea behind its formation and the reason for its existence and continuance.
Board of Directors
A NPO needs to be administered by a group of qualified people which have common beliefs and goals and who are willing to devote the time and resources for working towards the common cause or mission as stated above. It will be a value addition to the board members holding strong qualification in varying disciplines such as Bookkeeping, finance, law, technology, public administration etc. There are provisions on minimum [usually three] number of directors in each NPO and this is decided by legislations issued by the states.
Articles of Association
Articles of association contain the objective to be pursued by the NPO, its formation, rights, responsibilities and obligations of the board members and rules for functioning and administration. When setting up a nonprofit organization, this document should be registered with an agency nominated by the State. Besides the foregoing, the Articles also contain provisions that distinguish members of the NPO from itself, thereby making the organization.
Acquiring status as a 501c3 NPO
There are 501c3 requirements that must be met. Every NPO desirous of having its contributions exempt from tax under the IRS Code is required to register with the appropriate agency, normally the local office of the IRS. Pay the necessary filing fees, submit appropriate forms, documents, declarations and other relevant information – fees depend on the budget of the NPO. There may be exemptions under state and local laws as well, which will require a separate 501c3 application process. 501c3 organizations take some work to establish, but the filing status can be helpful come tax time.
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