Most nonprofits are 501(c)(3) organizations, 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 Missouri nonprofit corporation. Then you apply for tax-exempt status from the IRS and the state of Missouri. Here are the details.
First, you must form a nonprofit corporation under Missouri state law.
In Missouri, your nonprofit corporation must have three or more directors.
The name of your nonprofit corporation must be distinguishable from the name of any other business entity on file with the Missouri Secretary of State. To see if your proposed name is available, you can search Missouri's name database on the Secretary of State’s website. You may reserve a name for 60 days (and renew for two additional 60-day periods) by filing online or by mail an Application for Reservation of Name (BE 1) with the Missouri Secretary of State. The filing fee is $25.
Every Missouri nonprofit corporation must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the corporation's behalf if it is sued. The agent must have a physical street address in Missouri, not a post office box. Small nonprofit corporations typically name a director or officer to serve as the initial agent. The agent must consent to the appointment
To legally establish your corporation, you must create and file nonprofit articles of incorporation with the Missouri Secretary of State’s office. The articles of incorporation contain basic information about your nonprofit, including:
The Secretary of State has a fillable nonprofit articles of incorporation form on its website which you can use to create your Missouri nonprofit corporation. The articles form does not include certain language required by the IRS to obtain your federal tax-exempt status.
The instructions to the form on the Secretary of State’s website contains language you need to add to your articles for IRS purposes. This additional language includes provisions related to:
Be sure to include this language in the articles you create. For more information on IRS requirements for tax exemption, including sample language, consult How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo).
The articles must be filed by postal mail. The filing fee is $25.
You'll need to prepare bylaws that comply with Missouri 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 Missouri. Your bylaws do not need to be filed with the Missouri Secretary of State -- they are your internal operating manual.
For more information, see Nolo's article Nonprofit Formation Documents: Articles of Incorporation, Bylaws, and Organizational Minutes. For help creating your bylaws, see Nolo's book How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo).
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. Set up a corporate records binder to hold the corporation's articles, bylaws, consent forms, minutes and other important documents. For more information, as well as minutes forms, consent forms, and other resolutions, see Nonprofit Meetings, Minutes & Records, by Anthony Mancuso (Nolo).
Your nonprofit corporation must obtain a federal employer identification number (EIN). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Depending on the type of activities your nonprofit intends to carry on and where it is located, it may need to obtain a local and/or state business license or permit. For local licenses, check with the clerk for the city or town where the nonprofit's primary office is located (or county if it is in an unincorporated area). For state license information, check the State of Missouri's Missouri Business Portal.
All Michigan nonprofit corporations must file an annual report by August 31 each year listing its officers and directors. The report may be filed online or by postal mail. The filing fee is $20 for online filings, $45 for filings by postal mail. To request your annual report form for paper filing, contact the Secretary of State at 866-223-6535 or go online to print your annual report.
Now that you have created your nonprofit corporation, you can obtain your federal and Missouri state tax exemptions. Here are the 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.
Upon receipt of your 501(c) determination letter from the IRS, your organization is automatically exempt from Missouri corporate tax. Your nonprofit can obtain an exemption from Missouri sales and use taxes by filing a Missouri Sales Tax Exemption Application, Form 1746.
Depending on your activities and the size of your organization, you may need to register with the Missouri Attorney General before doing any fundraising activities. Check the Missouri Attorney General’s website for forms and additional information. For more information about fundraising registration requirements, see Nonprofit Fundraising Registration Digital Guide, by Ronald J. Barrett and Stephen Fishman (Nolo).