In this guide, we’ll show you how to form a nonprofit and apply for tax-exempt status to get your nonprofit off to a great start.
Use these steps to navigate the process of creating a nonprofit corporation in Mississippi, from filing proper formation paperwork, to applying for tax-exempt status, and beyond.
A nonprofit corporation board creates initial guidance for the group. Choose at least three, unrelated people to serve on the board of your Mississippi nonprofit. This meets the IRS guidelines and the requirements to open a business bank account.
Choose a name that represents your nonprofit well, but make sure that your chosen name is unique. The Mississippi Secretary of State (SOS) has a searchable online database to check if your nonprofit corporation’s chosen name is taken.
If the name you want is available you can reserve it with the state.
Once you hit on something, make sure it’s available as a domain as well. You’ll want something that aligns with your company name. When you find one, use our domain registration service to secure yours so no one else takes it.
A registered agent is a person who accepts processes of service and documents from the Secretary of State on your behalf. They must be a resident of Mississippi, have a physical address, and be available during standard business hours.
Some nonprofits opt to work with a professional registered agent to free up their time and avoid any awkward situations from being served with legal documents. ZenBusiness’s registered agent service can connect you with a registered agent that’ll meet your needs.
The filing process is straightforward, but it helps to know every step so that you don’t miss anything.
Formation is done by filing the proper Mississippi Articles of Incorporation online with the Mississippi Secretary of State’s office. There’s certain language suggested by the IRS for nonprofits to use. Keep this in mind when preparing your articles as it will make the process to get 501(c)(3) status easier.
The bylaws you create for your nonprofit corporation now will guide your corporation down the road. The bylaws establish guidelines including the number of directors serving the nonprofit and what the officer requirements will be for the corporation. You’ll want to set rules for how they’re elected, their term limits, and how they can resign or be removed. You’ll want to write up a conflict of interest policy as well.
Once you’ve filed your nonprofit’s paperwork, schedule an initial board meeting. This meeting not only ratifies the bylaws but also creates parameters by which the nonprofit will operate, such as setting your fiscal and tax year. This meeting will provide context for the goals and values of the nonprofit corporation moving forward. You’ll make decisions about banking, and designate someone to record the minutes from meetings.
Importantly, under the Mississippi constitution, you must hold the organizational meeting within two years of the date of incorporation. If you fail to do so, a court may declare your corporation’s charter invalid.
It’s important to maintain an effective record-keeping process for new nonprofits. Mississippi requires corporations to maintain an array of records including appropriate accounting records, the minutes of all meetings of the Corporation’s members and board of directors, and a list of members. Check Section 79-11-283 of the Mississippi code to make sure you are maintaining all required records.
Choose a safe place to keep your Articles of Incorporation paperwork, annual reports, business licenses and permits, and any other pertinent information. Most nonprofits have an area at their physical location or use a digital storage system like the cloud.
Your Mississippi nonprofit may require special licenses or permits, depending on the county in which you open your business.
Because there’s no one place to track this information, conduct research on your nonprofit’s industry. This will help you figure out what licenses and permits are necessary to support the nonprofit’s operations.
To make sure you don’t miss one, you can use the ZenBusiness business license report to make sure you’re up to par with what your nonprofit needs to run legally.
If your nonprofit corporation plans to solicit donations from the public, it may be required to register as a charity with the Secretary of State’s Office before beginning these efforts. The state recommends nonprofits reach out via phone to the Secretary of State’s Securities and Charities Enforcement to get more information on additional registration.
Next, you must apply for an EIN through the IRS. This number will represent your nonprofit’s entity for tax and identification purposes and is necessary to open a business bank account.
In Mississippi, you also need a tax ID number from the state. Your corporation must register with the Mississippi State Tax Commission. You can also go online to the Mississippi Department of Revenue website to file for a state EIN for your nonprofit. Keep in mind that, in general, nonprofits are not exempt from sales tax.
Your corporation must qualify as a nonprofit to receive a tax exemption from the IRS. Designation options include:
Fill out form 1023, there’s a long version and a short one. Fill out the one that best fits your nonprofit’s needs. Once your application’s approved you’ll receive a letter of determination.
To see if your nonprofit is eligible for any state exemptions, check the Department of Revenue’s website.
Your Mississippi nonprofit corporation requires insurance, depending on the corporation type. If your nonprofit plans to hire staff, then at a minimum, you need a workers’ compensation policy. Mississippi also requires corporations who have employees to register for unemployment insurance with the Mississippi Department of Employment Security.
Speaking with a professional insurance agent is one of the best ways to ensure you get the best policy for your nonprofit.
Your new Mississippi nonprofit corporation will need a business bank account. Having a dedicated business account lends credibility to your corporation and makes managing and organizing its finances much simpler. You’ll need your EIN, Articles of Incorporation, and information regarding your board of directors.
At ZenBusiness, we’re 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.
A nonprofit founder, working as an employee, can receive a salary as long as the amount is reasonable.
Nonprofits make money all the time. However, what sets nonprofits apart from traditional corporations is that they often use the revenue they generate to support the operations of the corporation. Profits can also be used to help those served by the nonprofit.
According to the IRS, examples of businesses that may serve as nonprofits include religious institutions, schools, official charities, public safety organizations, amateur sports outfits, companies that provide literary services, and organizations that provide services to children or animals.
Mississippi nonprofit corporations can sell products if they bring in revenue to help support the nonprofit.