How do I form a nonprofit corporation in Pennsylvania?
There are a few necessary steps to forming a nonprofit corporation:
Initial Considerations: Prior to incorporating, time should be spent laying the groundwork for your nonprofit corporation. This includes developing a purpose or mission statement, recruiting initial directors, choosing a name, and appointing a registered agent (someone who agrees to accept legal papers on the nonprofit's behalf if it is sued). In Pennsylvania, you must have at least one director who is at least 18 years old. To see if your proposed name is available, you can search the Pennsylvania Department of State's online business name database. The registered agent must have a physical street address in Pennsylvania.
Incorporation: Incorporation is the first step to the legal existence of a nonprofit corporation. Incorporating a nonprofit requires preparing Articles of Incorporation [DSCB:15-5306/7102] accompanied by a New Entity Docketing Statement [DSCB:15-134A], which are filed with the Bureau of Corporations and Charitable Organizations. The forms can be found on the Pennsylvania Department of State's website.
Advertising Requirement: In Pennsylvania, the incorporators must advertise their intent to file, or the actual filing of, Articles of Incorporation in two newspapers of general circulation, one of them being a legal journal. The advertisements must contain the name of the proposed corporation and a statement that the corporation is to be or has been incorporated under the provisions of the Nonprofit Corporation Law of 1988. Proof of compliance with the advertising requirement does not need to be filed with the Commonwealth, but proof should be submitted in the board meeting minutes.
Bylaws: Bylaws, the internal operating procedures for a nonprofit corporation, should be prepared prior to incorporating or immediately thereafter. Bylaws typically provide for the government of the nonprofit, the conduct of its affairs, the rights of members, the appointment of officers, and the management of property. This includes a process by which the nonprofit may elect directors.
Organizational Meeting of the Board: Corporations, including nonprofits, can only act through their employees, officers, and directors. For most actions, your nonprofit will act through its officers and employees. However, the board of directors must authorize certain acts for the acts to be valid, and these acts must be done in compliance with applicable law. Therefore, the board must take certain steps immediately after forming the nonprofit, which may include:
- Adopting a Resolution of the Incorporator that appoints the first directors;
- Adopting a Resolution of the Board of Directors that appoints corporate officers;
- Adopting a Resolution of the Board of Directors that authorizes the nonprofit corporation to take all action necessary to conduct its business and financial affairs;
- Adopting the bylaws;
- Relieving the incorporators from any pre-incorporation liability; and
- Adopting a corporate minutes book and recording all actions of the board of directors.
Tax Identification Number: Your newly formed nonprofit corporation must obtain a Tax Identification Number ("EIN") from the IRS. Your EIN will be associated with all organizational transactions and used to ensure the organization maximizes any advantages as a tax-exempt entity. A new bank account should also be established using this EIN.
Charitable Organization Registration Statement: Lastly, Pennsylvania requires a nonprofit corporation to register with the Bureau of Corporations and Charitable Organizations prior to engaging in fundraising (unless your nonprofit meets one of the exemptions). Generally, if your nonprofit receives more than $25,000 in contributions in a year, or if your nonprofit compensates any person for solicitation activities, you must register.
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