In most jurisdictions, corporations are usually classified based on whether they are meant to generate profit or they are nonprofit corporations. The classification guides the processes involved in setting them up. States such as Florida classify nonprofit corporations as 501C3. This simply gives guidelines for setting up such nonprofit corporations.
Setting up corporations in the United States is anchored on the internal revenue code. 501C3 happens to be a subsection under this code. It mainly focusses on the laws that govern taxes for nonprofit corporations. Based on this subsection, nonprofit corporations in the US are exempted from paying taxes. There are conditions that must be met for such exemptions. The corporation activities must be related to charity, religion, education, public safety, science among other helpful ventures to the ecosystem.
So, how do you establish a 501C3 in a state like Florida? The first one is having at least three members of the corporation in the board of directors. The minimum age of such directors is required to be eighteen. Then the corporation must have a name. This is followed by writing a mission statement for the corporation. The mission statement must include reasons for establishing the nonprofit corporation.
With the mission statement in place, the corporation can then be registered. To have your corporation registered, you need to have a filed article of incorporation. This should have been filed with the secretary of state, division of corporations. Having done that, create bylaws for the corporation. Records of the corporation must be kept after holding meetings with the board of directors.
If the above procedures have been followed, you can then obtain a registration number for your corporation. With this number in place, you can then register your corporation with the department of revenue in the state, say Florida. You should also seek registration at the department of consumer services. The final registration is with the IRS at the particular state. This will enable you to hire staff for your nonprofit corporation. Operations of the corporation can then commence.
Further information about the nonprofit corporation must be given to the state and particularly the agencies that are tasked with registration of nonprofit corporations. First of all, the physical address of the corporation must be availed for accountability. Here we are talking about the location and the address of the street. Secondly, the specific purpose of the nonprofit corporation must be stated. Thirdly, you must also declare the formula used to elect directors for the corporation. It is also at this point that you should state how elections for the board of directors of the nonprofit corporation will be conducted. All these measures are meant to achieve transparency and accountability.