How to Start a nonprofit corporation in Florida

Now that you have decided to start a nonprofit, you need to determine the charitable mission and purpose for the business. In order to comply with IRS regulations, it's important that your business is organized for an exempt purpose. Your business may not engage in political activities and must not overcompensate its members.

The next step is to decide on a name for your business. For nonprofits, it's important that you choose a name that clearly represents the mission of your organization. Be sure that the name you choose is easy to pronounce and memorable. Once you've decided on a name for your business, you should conduct a quick trademark search. This can help you find out if the name you want has already been taken and reduce the possibility of rejection.

It's also best come up with one or two alternatives, in case the name you want to register is not available in Florida.

Remember, a Florida nonprofit corporation must have a unique name. It cannot be "confusingly similar" to the name of any other Florida business. This is to prevent fraud or misrepresentation and is a common rule in all 50 states.

You can find out whether a name is available in Florida by searching the Florida Division of Corporations business entity and trademark database for possible conflicts. Be sure to check variations or alternate spellings as well, otherwise your filing may be rejected. In a pinch, you can use MyCorporation's business name search service, where we will conduct a more thorough search on your behalf and report back our findings. Plus, MyCorporation includes a business name search for free when we complete your LLC filings on your behalf!

Additionally, you may learn more about business name entity rules and regulations in the Florida Name Registration guide Opens in a new tab provided by the Florida Department of State.

Most states require that you designate a registered agent for your business, and Florida is no exception. A registered agent (often abbreviated as RA) acts as the state's means to communicate with a business. An RA is responsible for receiving legal and official documents related to the business. This may be an individual or third party service that agrees to accept legal papers on the corporation's behalf. A corporation may not act as its own registered agent for service of process.

A registered agent can be any individual who resides in Florida, or a third party registered agent service like MyCorporation who will act as a registered agent on behalf of the business. The agent must have a physical street address in Florida, and a P.O. Box is not accepted. In many cases, smaller businesses will designate a director of officer of the corporation to serve as the registered agent to start and select a new agent later when the business grows.

Registered agent information is publicly available. This may cause privacy concerns for business owners who do not wish to list their personal contact information for everyone to see. It is also common for the registered agent to become a target of spam or robocalls since this private information is relatively easy to obtain.

Registered agents are highly valued for their discretion. For example, if you did not have a registered agent and your business was served with lawsuit paperwork the documents would be delivered directly to your business address. This could be incredibly embarrassing for the business owner, especially if this happened in front of customers.

An RA will accept the documents privately to ensure additional privacy, organize the materials, and then deliver them to the business owner. This is why many business owners opt for a third-party registered agent service like MyCorporation to act as a registered agent on behalf of their business.

This may sound similar to the process of filing Articles of Incorporation for Corporations. The same document must also be filed for Florida nonprofit corporations in order to legally create a nonprofit.

Much like a corporation, a Florida nonprofit application must include basic information about the Florida nonprofit corporation including the company name, business address, mailing address, registered agent name and address, the nonprofit's purpose, effective date of the nonprofit corporation, and signature of at least one individual acting as an authorized representative.

Please remember that there are new Florida fees for filing Articles of Incorporation. As of 2019, the filing fee is $35 and must be included with your application. Registered agent designation is $35, a certified copy is $8.75, and a certificate of status is $8.75. Altogether, the total for filing is $87.50 - same as a corporation.

What information should be included in the Articles of Incorporation?

As noted above, information required in the Articles of Incorporation covers basic information as it pertains to the Florida nonprofit corporation.

Bylaws are the detailed set of rules agreed upon and adopted by the board of directors of the nonprofit. Think of these as an instruction manual to run the business. They include rules and procedures related to meetings you will hold, and notes on the ways you will elect officers and directors of the business.

While bylaws are not required for nonprofit corporations in the state of Florida, it is recommended that nonprofit corporations still maintain and keep a record handy. In a pinch, you may refer to the Florida Department of State's guidebook Florida Not for Profit Corporations Act (PDF) (847 KB) Opens in a new tab to help answer any questions you may have about nonprofit corporations in Florida.

If you are not sure how to create corporate bylaws, you can purchase MyCorporation's customized Minutes and Bylaws package. Inside our package you will find internal documents required to fulfill your corporate formalities and properly operate your business after it has been incorporated.

The first board meeting for your business is often referred to as the organizational meeting of the board. During this meeting, the initial directors of the business will adopt the corporate bylaws, set the fiscal year, and appoint corporate officers.

This meeting and all future meetings of the board of directors must be recorded in corporate minutes. Minutes are documents that detail what was discussed and any decisions the business makes during meetings. They are kept with the corporate records.

Corporate minutes are required for all Florida nonprofit corporations by law. Falling behind on this critical task can cause your business to fall out of good standing, and even jeopardize its tax-exempt status. It is important to maintain a corporate minute book. Inside you may keep originals or copies of all the signed and approved minutes or Actions by Unanimous Consent from any special or annual meetings of the corporation's shareholders and directors.

An EIN (also referred to as a Federal Tax ID) is a nine-digit number that is issued by the IRS and used to uniquely identify your business for tax purposes. Think of it as a Social Security Number (SSN) for your business, except an EIN is less sensitive. Like an SSN, an EIN allows you to:

• Open business checking, savings, or investment accounts
• File taxes for the business
• Complete payroll for employees if applicable
• Obtain lines of credit and credit cards, and build credit for your business
• Apply for applicable business licenses when required
• File for tax exempt status

You will only need a few pieces of information to file, including your mailing address and legal business name. You can apply online Opens in a new tab with the IRS by downloading IRS Form SS-4 (PDF)(116 KB), or work alongside a third party organization like MyCorporation to complete an EIN application.

Your nonprofit corporation is not automatically tax exempt. In order to become tax exempt, you will need to take certain steps to obtain this status. First, you will need to file for exempt status with the Internal Revenue Service using either Form 1023 (PDF)(866 KB) Opens in a new window or Form 1024 (PDF)(360 KB), depending on the classification of your organization.

In some cases, you may be eligible to file Form 1023-EZ Opens in a new window, a streamlined version of the application for recognition of tax exemption. You can avoid a $25 fee if you file for federal tax exemption before filing with the state.

Even if you have obtained federal exemption for your organization, you still need to submit an Exempt Application form (FTB 3500 Opens in a new tab) to the Franchise Tax Board to obtain state level exemption. Although most of Florida's laws dealing with tax exemption are like those found in the Internal Revenue Code, obtaining state exemption is a separate process from obtaining federal exemption.

You can learn more about the process directly from Publication 557 from the IRS (PDF)(2.1 MB).

Under the Solicitation of Contributions Act Opens in a new tab, Florida requires nonprofit corporations that solicit donations from Floridians to register with the Florida Department of Agriculture and Consumer Services (FDACS). The FDACS collects registration fees that are applicable to charitable organizations, including nonprofit corporations. Nonprofits are required to renew annually, if they solicit donations. Learn more about Solicitation of Contributions and how they work at the Florida Department of Agriculture & Consumer Services.

All businesses are required to file for a general business license (sometimes referred to as a business tax certificate) in the state of Florida. If you plan on operating your nonprofit in multiple cities, you will need to apply for a business license in each location. Additional permits may be required along with a general business license and are to be filed with the county or state.

You can find out about the specific licenses applicable to your business by checking with the city offices where you will conduct business, or by using MyCorporation's business license compliance package. Our team of skilled professionals will identify the licenses required by your nonprofit and provide you with all the information you need to file.