Starting a 501(c)(3) nonprofit in Massachusetts

Here are the steps for starting a non-profit in Massachusetts. I’ll update this as I go forward doing this.  The basic deal is this: it’s a corporation, and needs all the paperwork for a corporation.

Here’s an online quiz from the IRS about whether an organization is eligible for tax exemption.

Once it’s set up as a corporation, it then needs to be set up to be tax exempt with the feds and the state.

There are a lot of steps. Each one isn’t hard, and most of them are totally routine. The application for federal tax exemption sometimes gets turned down, but there’s an appeals process.

  1. Pick a name, like Kelleher Park Tenants Council Foundation, Incorporated. The name must say it’s a corporation.
  2. Choose at least one director.
  3. Prepare state articles of incorporation.  Here’s a blank. This document must meet the requirements of the IRS for 501(c)(3).  Here are general guidelines.
  4. File with the Secretary of the Commonwealth of Massachusetts and pay a $35 filing fee.
  5. Write some bylaws.
  6. Hold an organizational meeting
  7. Create a minute book.
  8. Obtain a Federal Employer iD number (a social security number for a corporation, basically). Easy. Online. Here.
  9. Register with the Division of Public Charities at the Mass. Attorney General’s office.
  10. Register to pay taxes with the Massachusetts Department of Revenue. That doesn’t mean the org will pay taxes, it’s just part of registering.
  11. There are more steps required if the org will have people on a payroll.
  12. Apply for federal tax exemption.
  13. Apply for state income tax exemption.
  14. Apply, if the org needs it, for state sales tax exemption. This gives a certificate that can be given to vendors (supermarket, hardware store, etc) telling them not to charge sales tax when the org buys things. This may not be necessary; food and clothing is free of sales tax in any case.

Ongoing requirements

Every year, on the anniversary of filing the state articles of incorporation, an annual report is required to be filed with the Secretary of the Commonwealth. $15 filing fee.

Sources:

http://www.dmlp.org/legal-guide/forming-nonprofit-corporation-massachusetts

http://www.irs.gov/Charities-&-Non-Profits/Application-Process

http://www.dmlp.org/legal-guide/articles-incorporation-nonprofits

 

 

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