There are many steps involved in getting a nonprofit set up. This guide shows you how to form a nonprofit corporation in North Carolina and answers common questions about starting and running a nonprofit.
North Carolina nonprofit corporations must have at least one director who is at least 18 years of age.
The name of your nonprofit must be distinguishable from any other entity operating in North Carolina. The name must also contain one of the following:
You can contact the Secretary of State’s office to find out if your preferred name is available, or use their searchable database. If your name’s available you can reserve it for up to 120 days.
Once you decide on a business name, don’t forget about the importance of an online presence. Pick out a domain name that matches your business name. ZenBusiness’s domain registration service can register a domain for you, once again, saving you time.
A registered agent is a person that accepts legal papers on a corporation’s behalf. In North Carolina, a registered agent must have a physical street address, not a P.O. Box. They must also consent to being appointed as the agent.
Many nonprofits appoint an officer or director as their registered agent. As the registered agent, they must be available during business hours to accept documents from the state or legal services. This can be not only inconvenient but not feasible for most individuals. ZenBusiness’s registered agent service can connect you with our registered agent partners to receive legal documents on your nonprofit’s behalf, upload them to your ZenBusiness dashboard, and then forward them to you.
Articles of Incorporation must be filed with the North Carolina Secretary of State, either online, by mail, or in person. Foreign (out-of-state) nonprofits must first apply for a Certificate of Authority. This application must include a Certificate of Existence/Certificate of Good Standing from your home jurisdiction that’s no more than six months old. The Certificate of Authority will allow your business to operate legally in the state of North Carolina.
The IRS has additional requirements for nonprofit corporations planning to apply for tax-exemptions. There is additional wording that relates to your statement of purpose and dissolution instructions. You also need to provide a statement that you won’t engage in activities not relating to your purpose, or prohibited political or legislative activities.
Bylaws cover how to manage corporate formalities, such as meetings and appointing officers. They should summarize the duties of those appointed, the process for electing them, and the process in which they resign. Corporate bylaws must comply with North Carolina laws, but there’s no need to file them with the state.
Your organizational meeting is the first meeting of your board of directors. You must approve bylaws and initial transactions, such as opening a bank account. You can also appoint or elect directors and officers. After your first meeting, your board of directors must meet at least once a year.
Your nonprofit’s paperwork must be kept in a secure place. This can be a records binder, but corporations can also use electronic storage, such as a secure cloud service.
Your federal Employer Identification Number (EIN) identifies you to the IRS. It’s needed before you can apply for 501(c)(3) status. You can get one for free through the IRS, or use ZenBusiness’s EIN service to organize that for you.
In North Carolina, the Secretary of State sends your Articles of Incorporation to the North Carolina Department of Revenue (NCDOR). Your EIN and the number assigned by the Secretary of State identify you to the NCDOR. The NCDOR also sends out a questionnaire to determine your tax status.
You may need licenses and permits to run your nonprofit. The exact licenses differ depending on where you’re located and what you do. Permits may be required at the federal, state, or local level.
It’s your responsibility to ensure that you have all the required licenses and permits. ZenBusiness’s business license report service can help identify the permits you may need. This will give you the security of knowing everything is taken care of and you can start your nonprofit on the right foot.
To apply for tax-exempt status, file Form 1023 with the IRS. There’s a long form and a short one. Fill out the one that meets the needs of your nonprofit.
There’s no formal application for exemption from North Carolina corporate taxes. You need to provide a copy of your Articles of Incorporation, bylaws, and IRS determination letter to NCDOR. These documents are evaluated and you’ll receive a determination letter advising you of your tax status and filing requirements. Most corporations that are exempt from federal income tax are also exempt from North Carolina corporate income tax. Some North Carolina nonprofits may be eligible for refunds or exemptions on property and fuel taxes.
Most nonprofits that intend to solicit donations in the state must obtain a license from the Charities Division before doing any fundraising.
The insurance needs of nonprofit corporations vary based on their work, industry, and assets. If you hire employees, you’ll need unemployment insurance and workers’ compensation. To determine any other insurance needs, consult with a qualified insurance agent.
Opening a bank account for your nonprofit allows you to keep the corporation’s finances separate from your own. The bank will ask for your EIN to open a business account. There may be other requirements to opening your account so make sure to call ahead so you have everything on hand.
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. Directors, who work as an employee of the nonprofit, can receive a salary for the work they do. However, it can’t be excessive. The IRS audits nonprofits to ensure they follow this direction.
Any money made by a nonprofit can be reinvested into the nonprofit or used to cover expenses related to the nonprofit.
Nonprofits formed for religious, charitable, scientific, literary, or educational purposes can apply for tax exemption from the IRS. Nonprofit corporations can also include healthcare providers, daycare centers, and food banks.
Nonprofit corporations can sell products both to raise funds and awareness of their cause. If you’re selling products, make sure you’re following any sales tax requirements in your location.
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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