Starting a nonprofit organization is not hard if you know what to do. We will help you get started by providing information on how to create a nonprofit, including the requirements and steps from beginning to end.
Nonprofits in Georgia are regulated under the Nonprofit Corporations Act of 2003. This act establishes who may organize and operate a nonprofit corporation, what purposes a nonprofit corporation may have, how incorporators form a nonprofit corporation, how an existing entity can be converted to a nonprofit corporation, how new bylaws are adopted, and rules for dissolving a nonprofit corporation.
The Nonprofit Corporation Act also sets forth provisions for defining public charity status.
The law does not provide specific guidelines on how nonprofits should allocate their fun1.4ррds or assets. Georgia law does expressly prohibit private foundations from having some of the advantages afforded to public charities, such as tax exemptions on donations and income from holdings.
Name Your Organization
Naming your organization can be one of the most complex parts of forming a nonprofit. You will need to decide on a name not already in use by another corporation or an existing service mark within Georgia. If you plan to incorporate, then make sure you use the correct legal terminology for your business purpose in creating your name.
For example, if your nonprofit is a charitable organization, then the legal term for this type of organization is “Charitable Organization.”
Officers and Directors
Every Georgia corporation must have at least one director. The officers are directors that hold executive positions within the company, such as President or Vice-President. An officer may be an employee of the nonprofit or an unpaid volunteer who works for the company.
Once you have decided on a name and have your list of officers and board members, you will need to file your Articles of Incorporation with the Georgia Secretary of State.
Nonprofit Board Members
Board members should be capable of carrying out the organization’s mission responsibly and effectively.
Bylaws are documents that lay out the rules and regulations for how your Georgia nonprofit corporation will be run. Bylaws should include information regarding how board meetings will be conducted, what quorum is needed to take action on issues or policies, and even what type of vote is necessary to approve specific actions.
Recruit Incorporators and Initial Directors
You will need to have at least three persons interested in serving as incorporators and initial directors of your company. Incorporators are the individuals who file the Articles of Incorporation with the Secretary of State’s office, whereas initial directors are the founding members of your board.
Prepare and File Articles of Incorporation in Georgia
Nonprofits in Georgia must file Articles of Incorporation with the Secretary of State. The articles must contain a statement to the effect that the business is organized for an exempt purpose, shall not engage in any activities that are prohibited under law, and that the corporation will dissolve if given permission to do so by its board or members.
The procedure for filing your Articles of Incorporation can be found in the Georgia Nonprofit Corporation Act http://law.justia.com/codes/georgia/2010/title-14-nonprofit-corporations/article-1/.
As soon as you finish filling out your article and have sent it to the Secretary of State, your Georgia nonprofit is officially incorporated.
Georgia Secretary of State Office Website http://www.sos.state.ga.us/
File Articles of Incorporation Online https://secure2.ss.ca.gov/lllweb_content/llltabsearch/Form/Index?formtype=CORP#action=home
The filing fee for Articles of Incorporation is $50.00. Still, if the nonprofit does not have more than 1,000 authorized shares, it can submit a letter with its articles stating that it will only issue enough shares to raise to $1 million in the capital.
If your company plans to create this type of structure, you will need to submit a letter with your articles explaining that the organization will not sell its shares above $1 million.
The Incorporators must complete an application form containing the name of the corporation and principal address, a statement that they are qualified to act as an incorporator by filling out an affidavit, and information that the corporation is organized for an exempt purpose.
Publish Incorporation in Newspapers
One of the most important documents your Georgia nonprofit must publish is called a “Notice of Formation.” This notice must be inserted into an Atlanta paper and also filed with the Secretary of State.
The Notice of Formation notifies all persons who received stock in the corporation that they now have the right to vote for or against directors and vote on specific issues.
File Annual Tax Returns
You have two options when filing for an exemption from taxes. You can apply for a 501(c)(3) or apply for a 501(c)(4). To qualify, you must prove that your nonprofit will be operated in a way that is not private or for profit. The IRS requires that both options file an annual information return – Form 990-N.
This form allows you to report the organization’s name, address, tax return filing requirement, the tax year period, and whether or not this is a new organization.
The form also has information regarding gross receipts, net income/loss, and assets.
A copy of your Articles of Incorporation must be attached to this form when it’s filed with the IRS. You will have thirty days from the date the state is due to send.
The IRS website has more details regarding these forms as well as where they should be sent. http://www.irs.gov/Charities-&-Non-Profits/File-Tax-Exempt-Application
If you are applying to be a 501(c)(3), then your articles need to state that the organization is organized for an exempt purpose. Suppose it’s operating as a nonstock corporation. In that case, it will also require that its objectives must not be directly or indirectly of any financial gain or profit to the members, organizers, or officers.
File Initial Report
If your organization is structured as a tax-exempt organization, you will be required to file an initial report with the IRS within sixty days of incorporation. This includes any changes that might have occurred since inception, such as name or address change.
The IRS requires form 8822-B to be filed when there are no changes in the information from the previous year. A copy of the organization’s Articles of Incorporation or any updated articles must be attached to this form when received by the IRS.
If there are changes in your organization, such as a name change, then you will need to complete the new Form 8822-B and attach it to Form 8822 when it is filed.
Obtain an Employer Identification Number (EIN)
There are specific requirements that both 50l(c)(3) and 501(c)(4) must adhere to remain tax-exempt. This includes applying for an employer identification number or EIN.
If you’re not sure if you need one, find out the answer through the following link:
Any Georgia business with gross receipts or a total of $500 and up in a year must obtain, complete, and submit a Form SS-4. Those with a gross of less than $500 will need to fill out a Form W-10 instead.
The SS-4 form helps you provide the EIN that your business needs for filing tax returns or other business purposes. It also allows you to change an existing EIN if
Store Nonprofit Records
Nonprofits are required to keep records of their operations, finances, and more. Ensure that whatever records your organization keeps complying with GA’s rules on nonprofit corporations:
This link from the State of Georgia will help you understand more about keeping your organization’s records and what they should include.
Establish Initial Governing Documents and Policies
A nonprofit is required to have several governing documents and policies in place. It’s essential that these policies are kept up-to-date so if you need to make changes, they are reflected in the plans in the future.
Hold Organizational Meeting of the Board of Directors
A nonprofit organization (especially 501c3) must have a board of directors in place, and they must hold an organizational meeting within the first two years after incorporation. This is the required legal beginning for your organization’s creation.
This form needs to be filed with GA, reported on your yearly tax return, and sent annually to the state so it can be kept up-to-date. If there are changes in your structure, then this must be updated as well. A sample of this report is available from GA at:
Get Georgia State Tax Identification Numbers/Accounts
If your company is a 501(c)(3), then you’ll need to obtain a state tax identification number (STIR) in addition to your federal EIN. A Georgia STIR is different than an Employer Identification Number and allows you to register for state taxes such as withholding licenses or unemployment insurance.
Apply for 501(c) Exemption
Once you’ve made the preparations mentioned above, then you can then apply for 501(c)(3) tax-exempt status. This process will require a great deal of information to be gathered and sent in with your application. The IRS requires that all applicants fill out either Form 1023 or 1024 depending on their organization’s structure.
Tax-Exempt in 2 Weeks!
When you have completed that task, you can send the required documents to the IRS for review. Suppose your paperwork is in order and no financial issues are discovered within 60 days. In that case, your application will be approved, and you’ll receive a letter from the IRS notifying you of its acceptance. This generally takes 2-3 weeks.
Apply for State Tax Exemption(s)
GA requires that your organization be tax-exempt at both the state and federal levels. The steps to becoming a state-tax-exempt nonprofit will vary based on if your organization has employees or not, but it starts with filing Form 1010S.
Filing this form will begin the process of gaining state tax exemption: http://sos.ga.gov/Businesses/Corporations-Nonprofit/Pages/Forms—Filings–ApplicationforStateExemptionStatus.aspx.
If your organization has employees, you’ll also need to file a copy of Form 941 with GA’s Department of Labor annually for each employee who works more than 1000 hours during the calendar year.
If the employee works less than 1000 hours, then you won’t need to submit a form for that person, but you will send in a letter with their name, social security number, and date of birth, so GA will know if they qualify as an employee or not: http://www.dol.state.ga.us/Forms/Documents/DE15.pdf
Register for Charitable Solicitation (Fundraising)
After your nonprofit is federally tax-exempt, state-tax exempt, and has employees, then it can begin to fundraise. GA requires that you sign up to be a registered charity at least ten days before you start collecting funds for your organization. The registration form can be found at:
Georgia Charitable Organization Registration Number
Once you register to fundraise in GA, then you’ll be assigned a registration number that will need to be reported each time you collect funds. Registration numbers are valid for 3-5 years and expire on December 31st of the final year. You can keep track of your active registration number from the GA’s Charitable Contributions Reporting Agency website.
One-Time Exemption Registration Number
Nonprofits may also qualify for one-time charitable solicitation registration if they aren’t forming a “fundraising campaign.” Past registration numbers are valid for six months and require that the company apply at least 30 days before fundraising.
Nonprofits that have employees will also need to keep payroll reports and issue W-2 forms regularly. If an individual makes over $10,000 per year, they’ll be considered a “covered employee” by GA’s Department of Revenue.
Covered employees are exempt from income tax withholdings but must file quarterly withholding reports with the state: http://dor.georgia.gov/SmallBusiness/Pages/Forms—Filings–W2StateExemptions.aspx.
To keep your registration numbers valid, you must renew your registration every 3-5 years. The renewal process will require that you submit an updated Schedule A with your filing.
How much does it cost to start a Georgia nonprofit?
The state filing fee for registering a new nonprofit in GA is $200. The registration renewal fee is also $200, but it can be prorated if the company has been written for less than three years.
There are no other fees or taxes associated with starting a Georgia-based nonprofit unless you plan on fundraising, then you’ll need to pay a $5 registration fee to the Charitable Contributions Reporting Agency: http://www.ctra.org/.
Nonprofit Laws & Regulations
The State of GA has a very accessible set of laws and regulations that apply directly to nonprofits and 501(c)(3) organizations: http://law.justia.com/codes/georgia/2005/title-45/chapter-2/.
The state of GA also has its website for business filings and corporation information: http://sos.ga.gov/Businesses.
How long does it take to start a Georgia nonprofit?
It takes about one week to register or cancel a nonprofit in GA. It would help if you planned on spending another 2-3 weeks gathering the necessary paperwork and setting up your nonprofit’s initial files.
GA State Register & Cancel Process
To register or cancel your Georgia-based nonprofit with the state, you’ll need to submit an online filing through the Secretary of State’s website. You’ll be offering the following documents:
- Application for Registration of Charitable Solicitation
- Form 809 (Disclosure of Lobbying Activities)
- Form 990, Schedule A of your latest filing if already registered federally or another state (if you’re re-registering, we recommend using the newest Schedule A available)
- $200 filing fee (varies based on date registered or when you last registered your nonprofit in Georgia, read more here )
Once the state approves or denies your application, they will mail you a document that notifies you of their decision.
To cancel your nonprofit’s registration with the state, you’ll need to submit a “Cancellation of Registration” form. You can find this form here.
What is the Transmittal Information Form?
The transmittal form summarizes your submission that the Secretary of State will use to identify and log your filing.
What is Schedule A?
Schedule A is the part of Form 990 where 501(c)(3) organizations describe how they spent their money in a specific year compared to the previous year. This detailed accounting is one of the main reasons an organization might want to prepare several Schedule A forms over their history.
Each year’s return provides a snapshot of how they’re doing compared to 6 months prior, one year prior, and two years earlier.
What are 990-N ePostcard Filings?
Most nonprofits that are filing tax returns with a gross income of under $50,000 do not have to file an official IRS tax return. Instead, they can report their gross receipts on the 990-N ePostcard Report and send it directly to the IRS.
This form is only available if you’re filing as a 501(c)(3) organization, so you’ll need to remember to check the box on this form that asks if your company is tax-exempt from federal income taxation. This same box will need to be checked when you’re preparing your Form 990-N ePostcard report.
Do Georgia nonprofits need to file for a business license?
All nonprofit organizations that are conducting business in Georgia will need to obtain a registration certificate by submitting an application for a Business Tax Registration Certificate. Along with this form, you’ll also have to submit:
- A copy of the Certificate of Incorporation or Gift, Trust or Estate from the National Register of Historic Places (if applicable)
- A list of the addresses of all locations that will be conducting business operations
- $50 filing fee
What is an Asset Test?
An asset test refers to a financial examination by an outside organization that checks for any gross discrepancies in your balance sheet. They typically look at your total physical assets and compare them against your reported net worth on your 990-N ePostcard filing and on Schedule B of Form 990.
This is another factor that might make people wary of choosing a specific non-profit to support as this is one way to ensure that your contributions are actually being used towards charitable activities instead of personal gain.
However, if you’re setting up a small nonprofit in your home, then an asset test is something you can probably skip as this will only be a requirement if you’re looking to raise over $50,000 in contributions.
What are the benefits of becoming a licensed Non-Profit Organization?
Your organization will have more credibility, and your donors will feel safer knowing that you’ve gone through this extra step. Being a licensed Non-Profit Organization means that your organization will be officially recognized by the state of Georgia.
This is also an extra step in helping you comply with the regulations set forth by the federal government, and it may help to attract more donors if they see that your nonprofit has gone through these steps.
What are some benefits of filing for a 501(c)(3) tax-exempt status?
There are many benefits to becoming a 501(c)(3) Non-Profit Organization, but one of the biggest reasons you might want to go through this process is so that you can start accepting tax-deductible donations from individuals.
This doesn’t mean that you’ll necessarily get more financial support as it’s still common for people to donate even if it’s not tax-deductible. But if you have the potential of getting larger donations, you might want to set that as your goal and go through the process of becoming a 501(c)(3) Non-Profit Organization.
How long does it take to become a 501(c)(3) Non-Profit Organization?
After you’ve filed all your paperwork, it can take anywhere from 4 to 6 months in order to get approved.
Your application may need to be sent back and forth once or twice before it’s finally accepted, but don’t give up! It’s worth the wait as your organization will receive the 501(c)(3) status once it’s been approved.
Can the founder of a Georgia nonprofit receive a salary?
As long as the pay is within fair market value and is reasonable, then it’s completely okay to accept a salary from your organization. But, remember that you’ll need to report this on Form 990-N ePostcard so don’t go overboard!
Do I have to register my Georgia nonprofit at both the state and county levels?
Georgia does not require any local licensing for nonprofits, so once you’ve registered your organization at the state level, you’re all set.
Will Georgia give me a tax-exempt number?
Yes! Once you have completed the application and paid your $50 fee to register as a Non-Profit Organization, they will provide you with a Tax Exempt Number.
Do I Have To Register My Nonprofit As A Charity In Georgia?
No, you do not have to register your organization as a charity in Georgia. However, there is an option to do so if you find that donors are more likely to give if you’re registered with the IRS as a 501(c)(3) Nonprofit Organization.
What is the advantage of starting a nonprofit?
There are many benefits to starting a nonprofit, but one of the biggest ones is that it gives you the opportunity to promote a cause that you’re passionate about. It may take some time and effort in order to build your nonprofit up from scratch, but there are great rewards when you eventually reach your goals!
What is the total cost of starting a nonprofit?
Not counting the cost of your tax-exempt number and any other fees that you might have to pay at the state level, you should be able to start a nonprofit for less than $100! The main steps in starting a nonprofit are finding an executive director, an accountant, incorporating your organization, and getting a bank account.
A few additional costs to take into consideration are liability insurance, business cards, free web hosting, and getting your Nonprofit EIN number