Starting your own nonprofit organization can be both exciting and overwhelming. You are looking to make a difference in the world and the opportunities to do so can be far-reaching, but getting started can be a monumental task. A 501(c)(3) organization is the most comprehensive type of nonprofit organization, and the process for establishing yours requires that you meet several requirements in order to qualify and have your business recognized as a 501(c)(3). Here are a few steps to help you get started.

Check if Your Organization Qualifies for 501(C)(3) Status

Under the Internal Revenue Code 501(c)(3), certain organizations are recognized as tax-exempt. To be considered tax-exempt, your organization must meet certain qualifications including being organized and operated for religious, educational, scientific, or other charitable purposes. Organizations that have purposes that fall outside of these four categories, such as advocacy, are not eligible for tax-exempt status. Additionally, your organization may not have any political or legislative activities, like attempting to influence legislation, as a part of its purpose. Lastly, your organization cannot be operated for the benefit of private interests.

Form a Board of Directors and File Your Articles of Incorporation

One of the first steps to establishing your 501(c)(3) is to form a board of directors. This board should consist of individuals with a variety of backgrounds and perspectives that can bring a lively level of discussion to the boardroom. Once your board of directors is established, you can then proceed with filing your articles of incorporation.

In California, 501(c)(3) corporations must file "Articles of Incorporation" with the California Secretary of State. The filing must include the following: 1) The corporation's name; 2) the purpose of the corporation; 3) the corporate office address; 4) the names and addresses of the directors, and; 5) the name and address of the individual who will serve as the corporation's registered agent. Additionally, you must include a clause in your articles of incorporation agreeing to abide by the regulations imposed on nonprofits, including federal and state tax laws.

Apply for Your Federal Tax Identification Number

Next, you must apply for a Federal Tax Identification number from the IRS. This is also known as an Employer Identification Number, or an EIN. The EIN is essentially the Social Security Number for your nonprofit organization - it is used to identify your business when filing taxes and for other official paperwork. You can apply for an EIN on the IRS website, and the process takes a few minutes. Once you receive your EIN, you need to open a business bank account, as this is one of the requirements of obtaining your 501(c)(3) status.

Apply for Your 501(C)(3) Status

Once you have your articles of incorporation, a board of directors, and your EIN, you are ready to apply for a 501(c)(3). This is done by filing a Form 1023 with the IRS. This form will need to include your EIN, a description of your nonprofit's mission, financial statements, and other information as required.

In completing this part of the process, it is important to have the support of an experienced legal counsel who understands the local regulations. This is especially true when navigating the complex and ever-changing rules that are associated with starting a 501(c)(3) in Los Angeles. They can also help you draft bylaws, advise you on matters such as reporting and disclosure requirements, and answer any questions you may have about the 501(c)(3) process in general.

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Starting a 501(c)(3) organization may seem daunting but with the right legal help, it can be a relatively straightforward process. Filing your articles of incorporation, obtaining your EIN, forming a board of directors, and applying for your 501(c)(3) status are the first few steps to getting your nonprofit organization recognized under the IRS. Having an experienced legal counsel who understands the local regulations can also provide guidance and help answer specific questions that may come up throughout the process.



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