You’ve found a cause close to your heart and want to start a nonprofit corporation to make a difference in your community. You must take specific steps to form a Kansas nonprofit corporation for charitable, religious, educational, humanitarian, scientific, or other purposes. If you’re confused about how to form a nonprofit corporation, this guide will help. We’ll walk you through how to form your nonprofit and apply for tax-exempt status.
Kansas law requires a minimum of one director, and only one director is required to form a committee. The state doesn’t have any residency or membership requirements, and there aren’t any term limits. A director can stay in their position until a successor is elected. The same person can hold more than one office. One officer must document the minutes of the board meetings and keep a record book. However, the Internal Revenue Service typically requires at least three unrelated board members for 501(c)(3) organizations.
Name availability guidelines in Kansas only require new business names to be distinguishable from existing business names on file with the Secretary of State. Names with small differences in spelling, a single letter or word added, or a number is written as a word, are allowed. Nonprofit corporations must include a word or abbreviation citing incorporation in their name: incorporated, corporation, limited, or association.
Use Kansas’s online business name search engine to check if the name you want for your nonprofit is available. Kansas doesn’t register doing business as (DBA), trade names, fictitious names, assumed names, general partnerships, or sole proprietorships.
To create a recognizable brand, you want your URL to match your nonprofit’s name. Look for website domain names that match your desired nonprofit name by using ZenBusiness’s domain name service to check availability.
You can reserve your business name before you complete your business formation to prevent someone else from taking it. Kansas allows you to reserve one or more names for 120 days with a nonrefundable fee of $30 per name.
Registered agents in Kansas are referred to as resident agents with registered offices.
The resident agent is authorized to accept services of the process for lawsuits or other courts/legal documents from your state agency overseeing business formation for your nonprofit corporation. The registered office is where the resident agent is located and available during all normal business hours. Your agent can be a person in Kansas or a business entity registered with the Kansas Secretary of State. Kansas law only allows certain types of entities to act as another business’s resident agent, so you may want to consult with your lawyer.
You or another person in your organization can act as your resident agent. However, you may find it inconvenient to be available at the address during all regular business hours.
If your nonprofit corporation needs a resident/registered agent, ZenBusiness’s registered agent services can help connect you with someone.
Filing your Articles of Incorporation legally creates your nonprofit corporation once it’s accepted by the state. You can file Form CN51-02 on the Kansas Secretary of State website. The fee to file is $20 and can be paid by check, money order, or credit card. This website also lets you stay current on your annual report due to date and your organization’s status and contact addresses. Articles of Incorporation must include the names and addresses of your nonprofit corporation, your resident agent, and your incorporators or directors. Your articles should include the type of business or purpose of your nonprofit, whether your nonprofit has members and your tax year. To keep your nonprofit in good standing with the state, you must submit an annual report with a $40 filing fee. In this report, you provide updates on basic information, such as the nonprofit’s address and current officers.
Before a foreign nonprofit corporation can do business in Kansas, it must register with the Secretary of State. Registration applications must include the name of the corporation, where and when it was organized, and its business type or purpose. Applications must include the name and address of the corporation’s local resident agent and the date it intends to start doing business in Kansas. Foreign nonprofits must attach a Certificate of Good Standing (CGS) issued within the last 90 days by the appropriate office where the nonprofit was formed. This certifies the business is up to date with all filing and business fees, has paid their taxes and is legally authorized to transact business.
Your corporate bylaws should specify rules and procedures your nonprofit will follow during meetings. Bylaws should include handling director elections, officer appointments, and other formalities required by the state. Kansas laws don’t require you to adopt bylaws or to submit a copy of your bylaws to the Secretary of State. However, you need bylaws to attach to your federal tax exemption application.
Your bylaws may contain any provision related to your corporation’s activities but can’t violate state laws or your Articles of Incorporation. Provisions included in your bylaws should include:
Your first official board meeting is the organizational meeting of the board. The board votes on the adoption of bylaws and officers and holds elections for directors that you don’t have in place.
Other matters you might address include getting approvals for federal/state tax exemption, opening a bank account, and compensation for founders and officers. You should also establish a fiscal year. You’re not required to hold this meeting in Kansas, but you must provide at least two days notice in writing before the meeting.
Your corporate records should contain all your important paperwork, including:
Keep all your documents in a standard three-ring binder. Alternately, you can store your records in the cloud or on a computer hard drive or flash drive. If you’re keeping your records electronically, ensure they can be printed quickly and easily when necessary.
Your federal employer identification number (EIN) acts as a social security number for your nonprofit corporation. It’s assigned by the IRS to identify your corporation for tax filings.
The IRS requires nonprofit corporations to get an EIN even if your organization doesn’t have employees. Getting an EIN is free. Turn to ZenBusiness’s EIN service for help with this process.
You also need your EIN for your Kansas Business Tax Application. Kansas doesn’t have State EINs, but you must register for a Tax ID (TID) Number. There’s no fee to register, and you receive your TID immediately after completing your registration online.
Register for and pay any applicable business taxes by setting up an account with the Kansas Department of Revenue Customer Service Center.
Your organization or its employees may need certain federal, state, or local licenses or permits from various agencies or commissions. Check with city and county clerks to help determine what you need. If your nonprofit is going to have bingo or raffles for fundraising, you must apply for a charitable gaming license. Licenses run $25 to $100 based on activities and gross receipts.
It’s your responsibility to obtain all the licenses and permits your nonprofit corporation needs. There isn’t a central location to check for all these requirements.
Make sure you don’t miss any federal, state, local, or industry-specific license or permit requirements with ZenBusiness’s business license report service.
A nonprofit corporation may be eligible for federal tax-exemption status. To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, your charitable organization must be operated exclusively for exempt purposes. You must apply to the IRS and have bylaws and board members. Filing fees are $600 for IRS Form 1023 or $275 if you qualify for Form 1023-EZ. Your federal income tax exemption also exempts you from state income tax, but you must pay income tax on unrelated business income.
Your 501(c)(3) exemption only applies to federal and state income tax; it doesn’t exempt your nonprofit from sales tax. Nonprofit organizations in Kansas aren’t generally exempt from sales tax, but there are some exceptions. If your Kansas nonprofit has employees and buys and sells goods or services, you’re responsible for employee income tax withholding and sales/use taxes. Your nonprofit may also be responsible for property taxes and other local taxes.
Your nonprofit must file a Charitable Organization Registration Statement for Solicitations with the Secretary of State. This must be approved before you can solicit funds or hire a professional fundraiser to solicit funds for your nonprofit. This document includes your organization’s name and any names you plan to use while soliciting donations. It also includes your organization’s purpose, the purpose of the donations being solicited, and lots of other information.
There’s a $35 filing fee, and the document must be signed by two different authorized officers. One of these officers must be the chief fiscal officer. The Secretary of State will issue you a charitable solicitation license and identification number upon approval of your completed registration as a charity.
Insurance requirements can vary based on the type of organization you have. Talk to a qualified insurance agent to make sure you get all the types of insurance policies you need.
All nonprofits should carry general liability insurance to cover bodily injury and property damage claims. Property insurance is also recommended for real estate or personal property, whether you rent or own a building. Other types of insurance you should consider include cyber liability, comprehensive commercial vehicle, special events, directors and officers, and errors and omissions insurance.
If your nonprofit has employees, you need workers’ compensation and unemployment insurance. You must create an account with the Kansas Department of Labor. Download the Kansas Department of Labor’s Handbook for Employers for information about your responsibilities as an employer.
Your nonprofit corporation needs its own bank account to keep from mixing your personal and business finances together. Corporate bank accounts are essential for accepting contributions, paying expenses, and holding funds for nonprofit activities. You need your EIN and a copy of your nonprofit Articles of Incorporation and bylaws to open a corporate bank account.
If your bylaws don’t specifically say you have the power to open a bank account, you may need a corporate resolution. This resolution should state that you’re authorized to open an account in the corporation’s name. Kansas banks have different regulations, so check to see if the bank you want to use has any other requirements.
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.
Founders can get paid a fair salary as long as they work as an employee and register as such with the business and IRS. Founders often don’t have other employment and spend numerous hours working for the nonprofit. Both the IRS and state laws allow the nonprofit to pay a reasonable wage to founders.
Kansas nonprofit corporations pay $20 to file their Articles of Incorporation. You can reserve a name for 120 days while you’re forming your nonprofit for a $30 non-refundable fee to ensure someone else doesn’t get it. The filing fee for federal tax exemption is $600 when filing IRS Form 1023 or $275 for IRS Form 1023-EZ. You’ll also pay a $35 filing fee for your Charitable Organization Registration Statement for Solicitations. If you want to use bingo or raffles to collect donations, a charitable gaming license is $25 to $100.
Despite the name, nonprofits do sometimes make a profit when the income generated is more than its expenses. If this profit is due to activities related to its government-approved charitable purpose, it’s not taxed. When the income earned isn’t related to its tax-exempt purpose, the nonprofit pays taxes on the profit just like other businesses.
Your business’s purpose must be charitable, educational, religious, literary, or scientific. It can also be for fostering national or international amateur sports competitions, testing for public safety, or preventing cruelty to animals or children.
Nonprofits in Kansas can sell products, but your business will probably have to collect and pay sales tax on the items sold. This requirement applies even when your business is a nonprofit. Generally, nonprofit corporations aren’t exempt from sales tax in Kansas. You must be registered with the Department of Revenue to collect sales tax from customers for the state, city, and county.
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