If you want to know how to start a nonprofit organization in Washington state, you'll need to file a registration with the Secretary of State and meet other guidelines and regulations depending on your business.

Choosing a Name

Before creating a Washington nonprofit, you need to come up with a distinctive name that is not too similar to other business names registered in the state. Your name must also meet state requirements.

You can check availability by using the Washington Secretary of State Corporate Divisions Name Search. For example, you cannot use the words partnership, corporation, incorporated, company, limited, or related abbreviations.

Filing Articles of Incorporation

At least one individual must sign your nonprofit's formation documents, which are called the articles of incorporation. These are the formation documents for your Washington nonprofit organization. You must submit articles that meet the IRS requirements for 501(c)(3) tax exemption.

They should include:

  • The corporation's name
  • The intended years of duration if applicable
  • The purpose of the nonprofit
  • Dissolution provisions that address asset distribution
  • Information about the responsibilities and rights of the members and directors
  • The address of the registered office and name of the registered agent
  • The number of directors on the initial board and their names and addresses
  • The names and addresses of all incorporators

Establishing a Board of Directors

You also need directors who guide your organization's mission and serve as the governing board. The IRS requires the board of directors to consist of at least three people who are not related to one another.

Washington state has no residency or membership requirements for directors of the board. They are allowed to serve until a successor is selected. A committee of the board must consist of at least two directors. The board must also have a president, at least one vice president, a treasurer, and a secretary. Except for secretary and president, a single individual can hold more than one office.

Nonprofits must have governing documents called bylaws that are consistent with both state law and the provisions of your articles of incorporation. At the first board meeting, the bylaws will be reviewed and approved by your directors. In addition to bylaw approval, the first board meeting will consist of director election, officer appointment, approval of important resolutions, and adoption of a policy to manage conflicts of interest.

Make sure to record any important decisions made in the initial meeting in the meeting minutes. This is also a good opportunity to organize other important documents for your nonprofit. These may include but are not limited to your 501(c)(3) determination letter, bylaws, and EIN letter.

Registering To Pay Taxes

The Secretary of State will issue your nonprofit a unified business identifier (UBI), which is also used as your tax ID number by the revenue department. Your business must also register with the state revenue department if:

  • You buy or process certain specialty wood items
  • You pay fees or taxes to the department
  • You earn a gross income of at least $12,000 annually
  • Your business must collect sales tax

You'll also need a federal employer identification number (EIN), which can be obtained for free from the IRS. You do not necessarily need to have employees to register for this number. It is also used to apply for tax-exempt status, open bank accounts and credit lines, and submit 990 returns to the IRS.

Seeking Tax-Exempt Status

Although seeking tax exemption for your nonprofit can be challenging, having 501(c)(3) status also allows you to apply for grants and collect tax-free donations. To apply, complete IRS Form 1023. Make sure you meet the eligibility requirements for this form. Some nonprofits must use Form 1024, including 501(c)(3) and 501(c)(6) organizations. If your application is approved, you'll receive a Determination Letter with your status from the IRS.

The Determination Letter allows you to subsequently apply for state tax exemption. However, Washington requires nonprofit organizations to pay sales tax on goods and services they purchase and business and occupation tax on gross revenue generated. They must also charge and remit sales tax for the services and goods they provide. Review the state's Nonprofit Organizations Guide to learn more.

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