In Delaware, you create a nonprofit by filing a "certificate of incorporation" with the Division of Corporations and paying a filing fee. You'll also need corporate bylaws signed by the board of directors, though these documents don't need to be filed with the Division of Corporations. Your bylaws explicitly state the rights and responsibilities of the directors and govern how your nonprofit will be run.
After your certificate of incorporation has been filed and you sign corporate bylaws, your nonprofit is official, but you will still need to obtain the licenses and permits that all new businesses must have to operate. These may include a business license (sometimes also referred to as a "tax registration certificate"), a federal employer identification number, a sellers' permit, or a zoning permit. Forming a nonprofit may not exempt you from any of these requirements that apply to all businesses.
For more information, see the Licenses & Permits for Your Business area of Nolo's website.
To begin creating your Delaware nonprofit, visit the Online Nonprofit page on the Nolo website.
After forming your nonprofit with the state, you have the option to apply for tax-exempt status with the IRS. Or, you can have a nonprofit without tax exemption, meaning the organization will be responsible for corporate, sales, property, and other taxes. Tax exemption is available to different types of nonprofits, including:
501(c)(3): Most nonprofits fall under this category, including organizations formed for the following purposes: religious, educational, scientific, literary, testing for public safety, amateur sports, and prevention of cruelty to children or animals.
501(c)(4): This includes social welfare groups such as civic leagues, social welfare organizations, homeowners associations, and local associations of employees. 501(c)(4)s can engage in lobbying and some political activity.
501(c)(6): Organizations such as business leagues, chambers of commerce, and professional associations fall under this category.
501(c)(7): Social and recreational clubs, such as country clubs and sororities, fall under this category. A 501(c)(7) is not organized for a charitable purpose, but to provide activities and other services to a particular group.
Our formation services are limited to nonprofits that will qualify for 501(c)(3) tax status and public benefit nonprofits that may not apply for tax exemption. To form other types of nonprofits, or if you are unsure which type of nonprofit you will form, consider talking to a lawyer.
The price of Nolo's Online Nonprofit formation service varies depending on your needs.
Nolo's Basic Service. The price starts as low as $49 for Nolo's Basic Service, which includes preparation and filing of the certificate of incorporation, minutes of the first meeting of the board of directors, and standard filing, which will take three to five weeks.
Nolo's Standard Service. Includes Nolo's Basic Service plus a filled-out Application for Employer Identification Number (EIN), Nolo's eBook Every Nonprofit's Tax Guide, and a coupon code for 75% off of any nonprofit book in Nolo's store, for $149. Processing time is three to five weeks.
Nolo's Express Premiere Service. Includes Nolo's Standard Service plus Priority Rush Filing, a personalized corporate records book that is foil-stamped with your company name, 20 personalized membership certificates, and a personalized corporate seal, for $299. With Priority Rush Filing, the state will process your certificate of incorporation within one business day, and you'll receive your final corporate documents three business days later. Your corporate records kit will be sent to you directly from the manufacturer.
Note that filing fees charged by the state are not included in our package prices. The Delaware Division of Corporations charges $98 in state fees for our Basic and Standard packages and $148 for the Express Premiere package. This filing fee will be added to your total when you check out.
To compare Nolo's nonprofit packages, see our package and pricing details. Please note that coupon codes are not applicable to corporate packages.
With the Priority Rush Filing that comes with Nolo's Express Premiere Service, your certificate of incorporation will be filed with the Division of Corporations within one business day, and you'll receive your final corporate documents three business days later. Your corporate records kit will be sent to you directly from the manufacturer.
With the Basic or Standard Service, your corporation will be formed, and you will receive your final corporate documents, in three to five weeks.
Will I have to pay taxes on my Delaware nonprofit?
Tax exemption. Forming a nonprofit does not automatically exempt you from taxes. You must file additional paperwork with the Internal Revenue Service (IRS) and the Delaware Department of Revenue to obtain tax-exempt status. Until you are approved, your nonprofit must pay federal and state taxes.
Federal tax exemption. 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 a lot of information about your organization, including its finances, organizational structure, governance policies, operations, activities, and more.
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. 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.
State tax exemption. Once a corporation obtains 501(c)(3) tax-exempt status from the IRS, it is automatically exempt from Delaware corporate income tax, and from the gross receipts tax on the sales of most goods and services. Nonprofits are also exempt from various state and local property taxes and business license fees. See the Department of Finance, Division of Revenue website for more information on state tax exemptions.
You can form your own nonprofit online by using Nolo's Online Nonprofit service. We will walk you through the information needed to form a nonprofit and provide you with resources to learn about nonprofit law. If you have a complex question, you may want to consult a nonprofit lawyer or tax expert. Click here for more information about how an attorney can help you form a nonprofit and your options for obtaining legal services.
If you are forming a nonprofit other than a 501(c)(3) organization or a nonprofit without tax-exempt status, consult with an attorney. Forming other types of nonprofits, such as cooperative corporations, 501(c)(4) civic leagues, 501(c)(6) chambers of commerce or business leagues, or 501(c)(7) social or recreational clubs, is outside the scope of our service.
Delaware's Division of Corporations does not require you to file written bylaws with its office, but our service provides customized nonprofit bylaws that help ensure that courts will respect the directors' personal liability protection and help to avert misunderstandings among the directors and officers over the nonprofit's finances, management, policies, and more. Every nonprofit needs bylaws to outline the organizational structure, establish the powers of the directors, officers, and members (if applicable), and lay out the procedures for holding meetings, electing directors and appointing officers.
For more information, check out Nolo's article on Nonprofit Bylaws.
Your organization's board of directors will draft and approve the bylaws. Nonprofits often draft bylaws before or shortly after filing formation documents with the state. However, you can create bylaws any time after formation.
Unlike other organizational documents, like the certificate of incorporation, you do not file bylaws with the state. You must keep them with your nonprofit's records, and ensure they are accessible to board members.
Nolo offers an online form you can use to create customized bylaws for your nonprofit. Our bylaws include the essential terms to help your board of directors run your organization, including the board structure, meeting and voting procedures, officer descriptions, member rights and responsibilities (if applicable), a conflict of interest policy, and more.
Forming a nonprofit does not take the place of obtaining a business license, tax registration certificate, and other required business permits. A nonprofit merely creates an ownership setup that limits the owners' personal liability. Even if the nonprofit's sales are nontaxable, the organization needs a seller's permit to sell goods or merchandise in the state. For more information on required licenses and permits, see the Licenses & Permits for Your Business area of Nolo's website.
Delaware does not require nonprofits to register to fundraise in the state so there are no fundraising registration requirements. However, Delaware nonprofits that solicit or receive donations in other states may have filing and reporting obligations in those states.
Your nonprofit will exist—and may incur taxes and fees, whether or not you are actively operating it—until you take legal steps to dissolve it. Depending on the structure of your nonprofit and your bylaws, you will need a majority or unanimous vote of the nonprofit's members or directors to approve the dissolution. After you have formally decided to dissolve, you must file a certificate of dissolution with the Delaware Division of Corporations.
Unlike for-profit corporations, nonprofits have restrictions on how they can distribute any remaining assets. After paying off any debts, a 501(c)(3) organization must distribute its remaining assets to one or more other 501(c)(3) organizations. For more information about closing a nonprofit, read the article How to Dissolve a Nonprofit Corporation in Delaware.
You have as long as you like to work on your nonprofit formation without purchasing it. Every time you work on your nonprofit order on Nolo.com, your answers are automatically saved. You may access your work-in-progress nonprofit by signing in to your Nolo account at https://store.nolo.com/products/customer/account/login, clicking on My Account, and clicking on Delaware Nonprofit.
You will receive a confirmation email, and your certificate of incorporation will be generated and sent to the Division of Corporations. With the Priority Rush Filing that comes with the Express Premiere Service, your nonprofit will be formed within one business day and you'll receive your final nonprofit documents three business days later. With the Standard and Basic Service, your nonprofit will be formed and you will receive your nonprofit documents in three to five weeks.
If you ordered Nolo's Express Premiere Service, your nonprofit corporate records binder and company seal will be sent to you independently, directly from the manufacturer.
When you receive your final nonprofit documents, you will receive instructions on a few more steps you need to take, which include holding an initial meeting of your directors and completing membership certificates (if you are forming a membership nonprofit and you purchase the Express Premiere package).
After completing your purchase, you may no longer go back and change your answers because your order is being processed. You may, however, view your answers by signing in to your Nolo account at https://store.nolo.com/products/customer/account/login, clicking on My Account, and clicking on Delaware Nonprofit.
Once we send your documents to the Division of Corporations, we cannot refund your state filing fees and other third-party costs, such as courier and delivery services, should you decide to cancel your order. If you have a question after submitting your order, you may contact our filings specialists by going to www.nolo.com/customer-support/filing-support.
You can take as much time as you like to work on your nonprofit answer choices. Every time you add or edit an answer, your work is automatically saved.
After completing your purchase, you may no longer go back and change your answers because your order is being processed. You may, however, view your answers by signing in to your Nolo account at https://store.nolo.com/products/customer/account/login, clicking on My Account, and clicking on Delaware nonprofit.
To learn more about nonprofits, visit the Nonprofits area of Nolo's website.