How to Form a Nonprofit Organization in Wisconsin
Knowing how to form a nonprofit organization in Wisconsin is an important part of achieving your social/community development goals.3 min read
Knowing how to form a nonprofit organization in Wisconsin is an important part of achieving your social/community development goals. The following are the steps you must take when setting up a nonprofit corporation in the state.
Choosing a Name
The first step towards incorporating your nonprofit in Wisconsin is choosing a name. The legal name of your nonprofit must be chosen carefully because it is representative of your organization. When choosing a name, ensure that it is unique and dissimilar to other organizations registered in the state. You should also check the availability of the name through the Secretary of State to make sure that it meets the state's requirements.
Designating Initial Directors, Incorporators, and Officers
When starting a nonprofit, you require incorporators to sign your organization' s article of incorporation. You must present at least one individual as an incorporator, although you are allowed to have multiples. Directors are stakeholders in the purpose and success of your nonprofit and form part of its governing body.
To meet IRS requirements, you should designate three unrelated individuals for the directorship position. You should also be aware of the residency and age requirements of the state. There must be one or more incorporators and at least three initial directors.
The article of incorporation requires the signature of only one incorporator. You should choose your incorporators and directors carefully in order to ensure the success of your nonprofit. You are also required to choose three officers; a president, secretary, and treasurer; however, this requirement depends on any stipulations within the nonprofit's bylaws or articles.
Appoint a Registered Agent
Registered agents are companies and individuals responsible for receiving legal documents and notices on behalf of your nonprofit. The agent must be a legal resident of the state and maintain regular business hours.
File an Article of Incorporation
Filing your nonprofit's article of incorporation marks the start of your organization. The article documents when and where your nonprofit was formed and also contains other relevant data necessary to verify its existence.
Although the requirements for filing an article of incorporation varies from state to state, the IRS requires you to meet some basic provisions when filing for tax-exempt status.
You must customize your nonprofit's article of organization and ensure that it meets both the IRS and state requirements. Once you meet these requirements when filing the article of organization, you avoid the risk of your 501(c)(3) application being rejected. In some states, you may be required to publish the article of incorporation.
Obtain an EIN
In order to identify organizations for tax purposes, the IRS issues a unique nine-digit number known as the EIN (Employer Identification Number). All organizations must obtain an EIN, not just those with hired employees. The EIN is used for a number of purposes including:
- Applying for 501(c)(3) tax-exempt status
- Opening a bank account
- Submitting returns to the IRS
Storing Legal Documents and Records
You will usually receive official documents when launching your nonprofit. In addition to documents such as the 501(c)(3) determination letter and EIN letter, you also need to store minutes of meetings you hold, articles of incorporation, bylaws, etc.
Establish Initial Policies and Governing Documents
The bylaws of your nonprofit constitute its governing document. It serves as the nonprofit's operating manual and must be consistent with both state and federal law as well as your article of incorporation. During the first meeting of your nonprofit's Board of Directors, the bylaws should be reviewed and ratified. Once this is done, they officially become the organization's roadmap for governance.
Instituting a Conflict of Interest Policy
It is also a good idea to institute a conflict of interest policy. There may be instances where a member of your nonprofit (someone holding a key position) has competing interests and uses their position to make and influence decisions that are beneficial to themselves but detrimental to the organization.
To ensure the smooth running of your organization, the organization's interests must be prioritized and all personal interests set aside. Before applying to the IRS for 501(c)(3) tax-exempt status, your organization's conflict of interest policy and bylaws must be approved and adopted.
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