The application for authority New York nonprofit is the registration that must be filed for this type of organization to do business in the state. In most cases, nonprofit organizations are formed under 501(c)(3), which provides federal and state tax exemption for organizations created for charitable, religious, scientific, educational, or literary purposes.

Basics of Nonprofit Organizations

Because of the exemption from federal taxes, tax deduction available for donors, and access to public funds, nonprofit organizations are subject to government scrutiny. This protects the public by ensuring that these organizations are transparent and accountable through various reporting requirements.

Nonprofits must show that they are free from conflicts of interest and support the public good to qualify for 501(c) status. Nonprofits are regulated by state agencies as well as by the IRS.

New York is a popular state to form a nonprofit organization, with almost 100,000 currently in existence. This provides a good opportunity for new organizations to align with an existing organization that has a similar mission. If you form a new nonprofit to serve an unmet need, it's important to take the correct steps to establish this type of organization.

Forming a New York Nonprofit

Nonprofit organizations in New York must have three or more directors who are at least age 18, though some youth organizations can waive this age requirement. You must choose a name for your nonprofit that distinguishes it from the names of other businesses in the state. You can search the state's business name database to determine if your desired name is available or submit a written inquiry about availability of the name to the Department of State.

New York nonprofits must contain one of the following words or abbreviations:

  • Incorporated
  • Inc.
  • Limited
  • Ltd.
  • Corporation
  • Corp.

Certain words cannot be used in a nonprofit name, and other words can only be used with prior state agency approval.

Formation Documents

To form a nonprofit organization in New York, you must file a certificate of incorporation with the Department of State. This document must include:

  • The name of your organization
  • The type of nonprofit you are forming
  • Names and addresses of at least three initial directors
  • The county where your organization will be located
  • The duration of the organization, if applicable
  • A name and address of a registered agent for service of process
  • Provisions about the organization's internal affairs

You can enter this information using the state's online application. While this registers your nonprofit, it does not establish 501(c) status with the IRS. To receive tax exemption, your certificate must include:

  • A statement of purpose with specific language that meets IRS requirements
  • A statement indicating that you will not engage in prohibited activities
  • A statement dedicating the assets of your organization to another 501(c)(3) upon dissolution

Sample language is available in IRS Publication 557, Tax-Exempt Status for Your Organization. Be sure to include the wording for both state and federal exemption.

Bylaws

Your nonprofit will need to establish bylaws that adhere to state law and IRS requirements. This document includes your corporation's procedures for having meetings, choosing officers and directors, and otherwise running the organization. This is an internal document and is not filed with the state. However, it will be reviewed by the IRS as part of your tax exemption request. You can obtain an employer ID number (EIN) from the IRS, which is used to open a bank account. Depending on the size of your organization, New York may require you to maintain a whistleblower policy.

Charitable Solicitation License

You cannot attempt to raise donations for your nonprofit until you file registration with the Charities Division of the New York Office and pay $25. Some types of entities, including those estimating gross contributions under $25,000, are exempt. Charities that do not register are subject to penalties.

State Franchise Tax Exemption

In New York, nonprofits must file for separate state income tax exemption by filing Form CT-247 after you receive your federal exemption from the IRS. The exemption will be processed within several weeks. Your organization may also be eligible for sales and property tax exemption. You can apply through the Department of Finance.

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