Most nonprofits are 501(c)(3) corporations, which means they are formed for religious, charitable, scientific, literary, or educational purposes and are eligible for federal and state tax exemptions. To create a 501(c)(3) tax-exempt organization, first you need to form a Florida corporation, then you then apply for tax-exempt status from the IRS and the State of Florida. Here are the details.
First, you need to form a nonprofit corporation under Florida state law.
In Florida, your nonprofit corporation must have three or more directors.
The name of your nonprofit corporation cannot be the same as the name of another nonprofit corporation on file with the Florida Department of State. To see if your proposed name is available, you can search Florida's name database.
In Florida, your nonprofit corporation name must contain one of the following words: "corporation," "incorporated," or their abbreviations. It may not contain the word "company" or its abbreviation, "co."
You will need to create and file nonprofit articles of incorporation with the Florida Department of State. The articles of organization must include basic information such as:
The incorporator must sign the articles and the registered agent must sign its consent to act as agent for service of process.
The Department of State has an articles of organization form on its website which you can fill in online, print out, and mail in. Complete and file your articles following the instructions provided on the Secretary of Commonwealth’s website.
The articles form on the Department of State’s website does not include language required by the IRS to obtain tax-exempt status. To receive 501(c)(3) tax-exempt status from the IRS, you'll need to have certain specific language in your articles, including:
For more information on IRS requirements for tax exemption, see IRS Publication 557, Tax-Exempt Status for Your Organization, available on the IRS website. Make sure you include the federal tax-exempt required language in the articles you create.
You'll need to prepare bylaws that comply with Florida law and contain the rules and procedures your corporation will follow for holding meetings, electing officers and directors, and taking care of other corporate formalities required in Florida. For more information, see Nolo's article Nonprofit Formation Documents: Articles of Incorporation, Bylaws, and Organizational Minutes, or, for help creating your bylaws, see Nolo's book How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo). Your bylaws do not need to be filed with the Florida Department of State -- they are your internal operating manual.
Your first board meeting is usually referred to as the organizational meeting of the board. The board should take such actions as:
After the meeting is completed, minutes of the meeting should be created.
You should set up a corporate records binder for your nonprofit to hold important document such as articles of incorporation, bylaws, and minutes of meetings. For more information, as well as minutes forms, consent forms, and other resolutions, see Nonprofit Meetings, Minutes & Records, by Anthony Mancuso (Nolo).
Now that you have created your nonprofit corporation, you can obtain your federal and Florida state tax exemptions. Here are the three steps you must take to obtain your tax-exempt status:
To obtain federal tax-exempt status from the IRS, you will need to complete and file IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. This long and detailed form asks for lots of information about your organization, including its history, finances, organizational structure, governance policies, operations, activities, and more. For line-by-line instructions on how to complete the Form 1023, see How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo).
Smaller nonprofits may be eligible to file Form 1023-EZ, Streamlined Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. This is a much simpler, shorter form that is filed online. Only smaller nonprofits--those with projected annual gross receipts of less than $50,000 and total assets of less than $250,000--are eligible to use the streamlined 1023-EZ application.
See the IRS website for more information on the Form 1023 and Form 1023-EZ filing requirements.
Once you have your federal tax exemption, you need to obtain your Florida state tax exemption. This may include exemptions from income, property, sales, and other state taxes. Florida's tax agency will have a form you need to file to obtain your state tax exemption.
Depending on your activities and the size of your organization, you may need to register with the Florida Department of Agriculture and Consumer Services (FDACS) before doing any fundraising activities. Check with that office for additional rules, or for more information about fundraising registration requirements, see Nonprofit Fundraising Registration: The 50-State Guide, by Stephen Fishman (Nolo).