Are you interested in creating an Arizona nonprofit corporation to benefit your favorite charitable cause, but not sure where to begin? In this easy-to-follow guide, we’ll break the process down into bite-sized pieces.
Directors are responsible for making decisions in a nonprofit’s best interest, ensuring its resources are used responsibly, and steering it toward its goals. Arizona’s statutes require at least one director, but to qualify for federal tax-exempt status, you should choose a minimum of three. Your directors don’t have to be Arizona residents, but each should have skills relevant to serving your nonprofit and its community.
Next, your nonprofit needs a distinctive name. To see which names are available, do a search on the Arizona Corporate Commission’s website. If your preferred name is available, you can reserve it with the state for 120 days.
While you’re thinking about names, you’ll also want to secure your nonprofit’s domain name for its website. Try to get something that aligns with your business name, then register your domain with our service and begin building your nonprofit’s name recognition and web presence.
Nonprofit corporations are legally required to designate a person or business to receive their important legal notices. In many states, this entity is called a registered agent, but in Arizona, it’s known as a statutory agent.
If you’re an Arizona resident with a permanent street address in the state, you have the option to be your nonprofit’s registered agent. Rather than risk missing an important notice, most people partner with a professional business services company. Use one of our registered agent partners to fill that role and take one thing off your plate.
In this step, you’ll apply to officially create your nonprofit. Your application should include a cover sheet, an Articles of Incorporation – Nonprofit form, a Statutory Agent Acceptance Form, and a Certificate of Disclosure. All of these are available on the Arizona Corporation Commission’s website.
Arizona law requires your Articles of Incorporation to list information about your nonprofit, including its name, mission, directors, and statutory agent.
To become a tax-exempt charity, the IRS requires you to use certain language on your Articles of Incorporation. You can find this language on their website. You can file your finished application with the Arizona Corporate Commission in-person, online, or by mail.
If you formed your corporation in another state, it’s considered a foreign corporation in Arizona. For your nonprofit to operate in Arizona, you must fill out an Application for Authority. Your application should include a cover letter, Statutory Agent Acceptance Form, and Certificate of Disclosure. You must also submit copies of your Articles of Incorporation from your corporation’s home state and Certificate of Good Standing.
Unless your nonprofit is formed in Maricopa or Pima County, you must publish a notice of its formation within 60 days. Choose a newspaper located in the same county where your nonprofit was created, and make sure your notice appears in three consecutive publications.
Arizona requires every nonprofit to write down and abide by bylaws. These are the official rules that your board of directors uses to govern your nonprofit.
To satisfy IRS nonprofit requirements, you should create a conflict of interest policy. The policy’s goal is to protect the corporation’s interests from potential conflicts with the private interests of directors or other members of your nonprofit.
Now, it’s time to gather your initial directors together for an organizational meeting. Put these items on the agenda:
Document everything that takes place during this and future meetings. Your official meeting transcripts will be an important part of your corporation’s records.
To stay compliant with local and federal laws, you must keep detailed, accurate records. These include your nonprofit’s formation documents, determination letters, bylaws, and meeting minutes. Store these in a physical binder or in a digital format, such as a cloud service.
Now, your nonprofit needs tax ID numbers. At the federal level, you need an Employer Identification Number Federal (EIN). You can get one through the IRS, or you can let us help you get an EIN stress-free, so you can focus on other aspects of your nonprofit.
Next, register with the Arizona Department of Revenue for any applicable state tax accounts. Learn more in their Guide to Taxes for Arizona Businesses, which can be found on their website.
In Arizona, a nonprofit doesn’t need a statewide business license, but depending on its location and industry, it may need other licenses or permits. Learn how you can save time and prevent frustration with our license report service.
Now that you’ve laid the groundwork, it’s time to apply for 501(c)(3) status, also known as federal tax-exempt status. Fill out IRS Form 1023. There’s a long version and a short one. Fill out the one that best fits the needs of your nonprofit. You’ll also want to make sure you use the specific language required by the IRS. You can find out more about that on their website.
Depending on the type of nonprofit you have, you’ll need to check with the Arizona Department of Revenue to see what taxes you’re exempt from and what forms you need to fill out.
Arizona’s nonprofits aren’t usually required to register at the state level to fundraise. Some counties may require registration, though, so check local requirements before soliciting funds.
There are many types of insurance a nonprofit may need. If you have employees you’ll need unemployment insurance as well as worker’s compensation. There might be other insurance needs depending on the type of nonprofit you have, so it’s best to seek out the services of a qualified professional to determine which insurances you need.
All a nonprofit’s funds need to go toward fulfilling its goals. Setting up a separate bank account will help you keep track of its funds. You’ll need to provide your nonprofit’s EIN and proof of its incorporation to open an account.
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service or are looking to register a domain, our goal is to help you stay on the road to success. Check out our services, and contact us today to see how we can help you grow your company.
Yes. Many founders become employees of their nonprofits. If the founder is employed by the nonprofit, they can receive a reasonable salary like any other employee.
Many nonprofits make money from donations, drives, and even grants. This is good news because any net earnings are earmarked for later use toward the nonprofit’s charitable goals.
A business may be considered a nonprofit if it exists to serve public interests. Many organizations may fall into this category, including those with humanitarian, religious, scientific, or educational goals.
Yes. Nonprofits can sell products in Arizona; however, the sales aren’t automatically tax-exempt. To request an exemption from Arizona’s Transaction Privilege Tax, send a letter to the Department of Revenue.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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