A majority of non-profits are 501(c)(3) organizations, meaning that they are formed for educational, religious, scientific, literary, or charitable purposes and are thus tax-exempt at both the state and federal level. However, to be recognized as a non-profit, the organization must be formed in accordance with provided laws.
The following is a step-by-step guide to creating a legally acceptable non-profit under the Pennsylvania state law.
You need to find a name for your organization in line with the Pennsylvania Naming Statues. Check to ensure a name is available by searching here on the PA Department of State Business Entity Search. You’re free to reserve the chosen name with the PA Department of State for $70. Otherwise, the name only becomes official upon the filing of Articles of Incorporation.
This is typically the "head" or leader/founder of the non-profit. The agent must be a resident of Pennsylvania or a member/owner of a business entity registered in the state. Whichever the case, they should be in a position to provide a physical PA address where they’re available during normal working hours. The agent’s main job is to handle official documents on behalf of the organization.
Incorporators are responsible for executing the Articles of Incorporation. Directors, meanwhile, are charged with overseeing the organization until a permanent board is installed. Persons appointed to both positions must be at least 18 years old, though they don’t have to be residents of Pennsylvania.
Bylaws are the rules and regulations that govern the operations of the organization. The reason you want to draft the rules at this early stage is that failure to do so would result in the non-profit being subjected to default rules set by the state. For assistance with By-law creation, please contact me.
Download the articles of incorporation, Form [DSCB:15-5306/7102] from the PA Website. Fill in the required information, and send the documents by mail to the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations or complete online. The filing fee is $125.
A records binder holds important documents such as bylaws, articles of incorporation, and minutes for proof of compliance. This is both good to have in digital and in print form.
The first meeting of a newly formed non-profit is called a “meeting of the board.” In this meeting, the earlier appointed directors; elect senior officials, approve the organization’s bylaws, set up an accounting period and tax year, and approve initial transactions of the corporation. At the end of the meeting, the recorded minutes should be properly filed.
The EIN is required at both the state and federal level to track the organization’s financial activities. It is also what gives non-profits a legal right to open a business account and hire paid employees. You can obtain an EIN at no cost by applying online via the IRS website. Please contact me if you need assistance.
First, download, complete, and file IRS Form 1023 (Application for Recognition of Exemptions Under Section 501(c)(3). Or, for smaller no-profits with less than $50k annual gross receipts and $250k in assets, you can file Form 1023-EZ online. It’s much shorter compared to Form 1023 and most non-profits will use this form. Once you’re done, apply for your Pennsylvania state tax exemptions by completing and filing Form REV-72.
With that done, you can then proceed to open a bank account for your non-profit and register with the state before you host your first fundraiser.
Note: Processes can change over time so be aware this information was valid at publication 7/2018, but may be different in the future.
That's it! It's a process but can be done for those ready to setup a non-profit in Pennsylvania! Questions or need assistance with this PA Non-profit setup process? Contact me.