Starting a nonprofit in NC: Everything You Need to Know
Starting a nonprofit in NC is when you establish a nonprofit organization in the state of North Carolina.3 min read
Starting a Nonprofit in NC
Starting a nonprofit in NC is when you establish a nonprofit organization in the state of North Carolina.
The Steps to Form a 501(c)(3) Nonprofit Corporation in North Carolina
The vast majority of nonprofit organizations are 501(c)(3) entities meaning they are developed for charity, religious, educational, scientific, and literary purposes and are therefore exempt from the taxes imposed by both the state and federal government.
Outside of the exemptions for the income tax, the 501(c)(3) organization is able to apply for and receive grants as well as dentations. The organization retains a limited liability that is enjoyed by the officers and directors of the organization. The distinction also allows for a greater credibility and legitimacy that helps to garner the respect and confidence of the public.
In North Carolina, there are over 40,000 nonprofits, as of 2012, and in addition to some of the basic advantages of creating the entity, the organization and its members will not have lawsuits attached to its specific members. This means that these individuals are personally protected from financial losses. Only the organization will be liable for lawsuits and vulnerable to creditors.
Before you begin the organization, you will need to understand if there is a need in the community for a nonprofit. Basically, you want to make sure that the organization that you intend on forming is helpful to the North Carolina community in which you live. If you find that other organization in the area are already meeting a similar need or cause, then you may want to combine efforts with said organization. This way, resources can be used by both entities to promote the overall cause.
When you are ready to develop your 501(c)(3) entity with tax exempt status, your will need to create a North Carolina nonprofit corporation. The corporations will be developed under the North Carolina State law. Once you do this, you can apply for the exemption status through the IRS.
Form Your North Carolina Nonprofit Corporation
As you start the nonprofit, draft a mission statement. This should happen before you actually complete any work with the entity. Also, according to the laws in North Carolina, the state will need to have at least a singular director. And individual over the age of 18 should be appointed. However, there are some youth organizations that do allow individuals as young as 16 to become directors.
Directors are individuals who govern the nonprofit and also become stakeholders. These people should be unrelated and will need to be identified as directors so they meet the requirements set forth by the IRS.
The person who ends up signing the Articles of Incorporation for the nonprofit is the incorporator of the entity. This person needs to be identified with the directors of the organization. In addition to age requirements, directors should be people who are citizens of the United States. However, there are no residency or membership requirements. The term for the specific director is one year.
Before a person filed the Articles of Incorporation paperwork, it is advisable to appoint a registered agent or a specific individual who oversees receiving documents and notices on behalf of the business. This registered agent needs to physically reside in the state of North Carolina with a business that holds hours during the day.
Outside of picking a registered agent, you will need to choose a name for the organization that signifies the entity and what it does. This name needs to be different than all other nonprofits that are already established in the state of NC. Also, it must be unique from other types of businesses that include partnerships, limited liability companies, and corporations in the state.
The name of the nonprofit will need to include the term corporation, company, limited, incorporated, or one of the abbreviations that signify what the nonprofit is. Once the name is established and all the other provisions are considered, the Articles of Incorporation paperwork can be filed.
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