In the following, we’ll explain how to form a Minnesota nonprofit corporation. We’ll show you how to do this and how to apply for tax-exempt status.
Your Minnesota nonprofit corporation will need at least three directors. A majority of them must be adults. You’ll need at least one incorporator, aged 18 or older. There are no residency or membership requirements.
Pick a name that best describes the activities or purpose of your nonprofit corporation. It needs to be different from any other name currently filed with the Minnesota Secretary of State. You can check and see if your desired name is available on the Online Business Services page of the Secretary of State.
You can reserve your name for twelve months with the state of Minnesota by filling out the Request for Reservation of Name form. The fee is $55 for expedited, in-person, or online filing. If you opt to mail it in, the cost is $35. The address for mailing or going in person is below:
Minnesota Secretary of State
Business Services Retirement Systems of Minnesota
Empire Dr., Suite 100
St Paul, MN 55103
If your name’s available, you’ll want to ensure that no one takes it before you’re ready to file your Articles of Incorporation. ZenBusiness offers a name reservation service that will protect your name until you’re ready to file, giving you time to focus on other more important things.
You’ll need a domain name (web address) that you can use. ZenBusiness can help you secure the perfect domain name with its domain registration service.
Every Minnesota nonprofit requires a registered agent. A registered agent acts on the behalf of your corporation. They receive important papers and notices from the state as well as any legal documents affecting your nonprofit. A registered agent must have a physical address in the state and operate an office that’s open during regular business hours.
You can be your own registered agent or look for one, but that takes time and it’s a hassle you don’t need. ZenBusiness offers a registered agent service. Our registered agent providers will accept all necessary documents and post them on a dashboard where you can access them with ease.
The next step is to file your Articles of Incorporation with the Secretary of State’s office. There’s a $70 filing fee.
Although the Secretary of State’s office offers a Minnesota Nonprofit Corporation Articles of Incorporation form that you can use to fill out your Articles of Incorporation, it’s bare-bones and doesn’t ask for information about items that will be important when you file for your 501(c)(3) tax-exempt status with the IRS. You’ll find better examples of what you’ll need to include in your Articles of Incorporation on the Minnesota Council of Nonprofits website.
These are the documents that will govern your corporation. The bylaws include rules on how to govern your nonprofit. From how to elect or replace your directors and officers, to running your meetings, and how to resolve a conflict of interest. You don’t need to file a copy of your bylaws with the Minnesota Secretary of State.
The initial meeting of your corporation is one of its most important. You’ll approve the bylaws, appoint officers, decide on a tax year, and approve the opening of a bank account.
It’s important to keep the minutes of your meetings. You’ll also want to keep copies of all important documents in a binder in a physical location or digitally on the cloud. Choose something secure to keep your information safe that fits your needs.
You’ll need to apply for your Employer Identification Number (EIN) from the IRS. You’ll need it to hire employees, open a bank account, and file taxes with the IRS. ZenBusiness offers an EIN service that will help you obtain this important identifier for your corporation.
The state of Minnesota doesn’t require nonprofits to obtain a statewide business license. However, licenses or permits may be required from other levels of government. No official database exists where you can check to see what’s needed. ZenBusiness can help you keep track of all the necessary licenses and permits with its business license report service.
You’ll need to apply for 501(c)(3) tax exemption from the IRS if you plan to raise funds or accept donations. You’ll be asked for a lot of information about your nonprofit and the language you use is important. Check with the IRS website to see exactly what information is needed. When you have everything, fill out form 1023 to apply for your tax-exempt status. There’s a long and short form, fill out the one that applies to your nonprofit.
Once granted tax-exempt status by the IRS, your corporation is exempt from paying corporate income tax. You may still need to pay property or sales tax. You can apply for sales and other tax exemptions at the Minnesota Department of Revenue.
Your nonprofit corporation is required to register with the office of the state Attorney General.
The kind of insurance you’ll need depends on what kind of nonprofit you’re operating. If you have employees, you’ll need unemployment insurance as well as workers’ compensation. Your best bet is to use the services of a licensed insurance agent to ensure you cover all your bases.
To open a nonprofit bank account, you’ll need a copy of your Articles of Incorporation, your EIN, and a copy of your bylaws. Having these on hand will make the process easier and faster.
Yes. A founder can receive a reasonable salary if they work as an employee.
If the money made is in the service of your nonprofit’s mission, it’s not considered income and therefore isn’t taxable. This money can be put back into the nonprofit to improve its services.
Nonprofits include charities dedicated to providing help and services for educational, scientific, charitable, veterans, healthcare, and religious causes.
A nonprofit can sell goods and services to raise money to further the nonprofit’s mission. Make sure you have applied for sales tax exemption status from the Minnesota 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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