How to Form a Virginia Nonprofit Corporation

Here are the steps to form a 501(c)(3) nonprofit corporation in Virginia.

By , J.D. USC Gould School of Law

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 Virginia nonprofit corporation. Then you apply for tax-exempt status from the IRS. Here are the details.

  1. Choose directors for your nonprofit.
  2. Choose a name for your nonprofit.
  3. Appoint a registered agent.
  4. File Virginia nonprofit Articles of Incorporation.
  5. Prepare nonprofit bylaws.
  6. Hold a meeting of your board of directors.
  7. Obtain an employer identification number (EIN).
  8. Obtain business licenses.
  9. File annual report.
  10. File Form 1023 for federal tax exemption.
  11. Apply for Virginia tax exemptions.
  12. Complete other state reporting and registration requirements.

Form Your Virginia Nonprofit Corporation

To form a nonprofit corporation in Virginia, you need to form a nonstock corporation under Virginia state law (Title 13.1, Chapter 10 of the Virginia Code).

1. Choose the initial directors for your corporation

In Virginia, you must have one or more directors on your board.

2. Choose a name for your Virginia nonprofit corporation

The name of your nonprofit corporation must be distinguishable from any name that has been designated, registered, or reserved for use by another business entity in Virginia and the names of all active business entities on file with the Virginia State Corporation Commission.

Names may be checked for availability at the Virginia business name database.You may reserve a name for 120 days by filing an Application for Reservation or Renewal of a Corporate Name with the Virginia State Corporation Commission. The reservation may be filed online or by postal mail. The filing fee is $10.

See Virginia Code §13.1-829 for more information on name restrictions for nonprofits.

3. Appoint a registered agent

Every Virginia 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 Virginia, 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.

4. Prepare and file your nonstock articles of incorporation

You create your nonprofit entity by filing articles of incorporation for a nonstock corporation with the Virginia State Corporation Commission. Your articles of incorporation must include:

  • your nonprofit's corporate name
  • the nonprofit's purpose--this must comply with IRS requirements (see below)
  • whether your nonprofit will have members
  • how directors will be elected
  • name and street address of corporation's initial registered agent
  • the name and address of the initial director or directors
  • limitations and restrictions (see below)
  • provisions regarding the corporation's assets upon dissolution (see below), and
  • the signature of the incorporator.

The Virginia State Corporation Commission has a fillable Articles of Incorporation Template for a Virginia Nonstock, Nonprofit Corporation (SCC819NP) on its website which you can use to create your nonprofit corporation. Complete and file your articles following the instructions provided.

The articles form available from the state has the minimal information necessary to create a nonprofit in Virginia. It does not include language required by the IRS to obtain 501(c)(3) federal tax-exempt status. To receive tax-exempt status from the IRS, you'll need to have additional specific language in your articles, including:

  • a statement of purpose that meets IRS requirements
  • statements that your nonprofit will not engage in prohibited political or legislative activity, and
  • a dissolution of assets provision dedicating your assets to another 501(c)(3) organization upon dissolution.

To receive tax-exempt status from the IRS, you'll need to add these clauses to your certificate yourself. You can add the purpose clause in the blank space provided in Article II on the form. The prohibited activities and dissolution clauses can be added in Article VII "Limitations and Restrictions," and the dissolution clause in Article VIII. You can find sample language to use approved by the IRS in the Instructions for IRS Form 1023-EZ, (see Part II).

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 may be filed online or by postal mail. The filing fee is $75.

5. Prepare bylaws for your Virginia nonprofit corporation

Before you file your articles of incorporation, you'll need to have bylaws that comply with Virginia law. Your bylaws 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 Virginia. Your bylaws do not need to be filed with the state -- they are your internal operating manual.

For more information on bylaws, 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).

6. Hold a meeting of your board of directors

Your first board meeting is usually referred to as the organizational meeting of the board. The board should take such actions as:

  • approving the bylaws
  • electing directors (if not named in your articles)
  • appointing officers
  • setting an accounting period and tax year, and
  • approving initial transactions of the corporation, such as the opening of a corporate bank account.

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).

7. Obtain an EIN

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.

8. Get your business licenses

Depending on the type of activities your nonprofit intends to carry on and where it is located, it may need to obtain a state business license. For local licenses, check with the clerk for the city where the corporation's primary office is located (or county if it is in an unincorporated area). For state license information, check Virginia's Business OneStop website.

9. File an annual report

Each Virginia corporation is required to file an annual report in the Office of the Clerk by the last day of the 12th month after it was incorporated, and this date in each year thereafter. The annual report can be filed online through SCC eFile or on a form furnished by the Corporation Commission. To obtain a preprinted annual report form to complete and file, provide the requested information on the Electronic Forms Request page

Obtain Your Federal and State Tax Exemptions

Now that you have created your nonprofit corporation, you can obtain your federal and Virginia state tax exemptions. Here are the steps you must take to obtain your tax-exempt status:

10. File your Form 1023 federal tax exemption application

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.

11. Obtain your Virginia state tax exemptions

Nonprofits who receive 501(c)(3) tax-exempt status from the IRS are automatically exempt from Virginia's income tax. Your nonprofit must apply for an exemption from Virginia state sales and use taxes. Check with the Virginia Department of Taxation for details.

12. Other state reporting and registration requirements

Depending on your activities and the size of your organization, you may need to register with the state before doing any fundraising activities. The Virginia Department of Agriculture and Consumer Services, Office of Consumer Affairs, has information and forms about fundraising and registration requirements for nonprofits. For more information about fundraising registration requirements in all 50 states, see Nonprofit Fundraising Registration Digital Guide, by Ronald J. Barrett and Stephen Fishman.

Ready to start your Nonprofit Corporation?

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