How to Form an Oregon Nonprofit Corporation
However, for those looking to form an Oregon nonprofit corporation, the process can seem daunting. Fear not! We’ve created this guide to help you get your nonprofit started so that you can start making a difference.
Select the initial board of directors
The most important first step for forming your nonprofit is selecting your Board of Directors. Your Board will be the individuals who govern your corporation and oversee all of its activities, including:
- Meetings and agendas
- Contracts, finances, and budgets
- Creation and continued review of bylaws
Oregon requires that all nonprofit corporations have a Board of Directors with at least three members who aren’t related.
Choose a name
One of the most important decisions you’ll make for your new nonprofit is deciding on a name. Your name should be memorable and represent your corporation and its mission. This can help you attract the attention of your target community.
Once you have a few good name ideas and have made sure they meet Oregon naming requirements, head over to the Oregon Secretary of State’s Business Name Search Tool. There, you can search for other businesses and make sure your preferred name isn’t taken.
If your name is available, you can reserve it with the state for 120 days by creating an account on the state’s website. If you want to avoid as much paperwork as possible so you can focus on the purpose of your nonprofit, consider using ZenBusiness’s name reservation service.
Choose an Oregon registered agent
Every Oregon nonprofit corporation must appoint a registered agent for its corporation. A registered agent accepts paperwork from the Oregon Secretary of State as well as any legal documentation, such as subpoenas.
To qualify as a registered agent in Oregon, the individual or entity must work within the state and be available during normal business hours. They also need a physical street address — no P.O. boxes allowed. You can act as your own registered agent, but this will tie you to the office and awkward situations may arise if you’re served any legal papers. That’s why using an outside registered agent service is a good idea.
Take a look at ZenBusiness’s registered agent service. We’ll connect you with a provider who can accept your documents, upload them to your dashboard, and forward them to the designated person at your office.
File Articles of Incorporation with Oregon
Nonprofit corporations in Oregon need to file their Articles of Incorporation with the Oregon Secretary of State. When filing, you’ll need to classify your new nonprofit corporation into one of the following three corporations:
- Religious corporation
- Nonprofit public benefit corporation
- Mutual benefit corporation
Once they’ve been approved, you’re officially incorporated as a nonprofit corporation in Oregon.
Draft your Oregon nonprofit corporation’s bylaws
Once you’ve filed your Articles of Incorporation, you’ll need to draft your nonprofit’s bylaws. Nonprofit corporations are required by the state of Oregon to have bylaws.
Bylaws define the responsibilities of your members, officers, and directors. They should include your corporation’s internal policies and instructions for how your corporation will operate from day to day.
Hold an organizational meeting with the board of directors
Your first meeting with your board of directors will be busy. The meeting should cover the approval and adoption of your corporate bylaws. Set term limits of officers and or directors. You’ll decide on a bank account, your fiscal and tax year, a conflict of interest policy, and designate someone to maintain the minutes of all meetings.
Implement corporate record keeping
Starting and running a nonprofit requires a lot of paperwork. You can avoid problems and smooth out potential issues by keeping well-documented records.
There aren’t any specific storage requirements in Oregon. You can keep your records at your nonprofit’s physical location or look into cloud storage options. Just make sure they’re easy to access for compliance and auditing purposes.
Get tax identification numbers
Once you’ve filed your Articles of Incorporation and you’re officially a nonprofit, you’ll need to get an Employee Identification Number (EIN). The EIN is used by the IRS to identify your nonprofit corporation, and is required by federal law. It’s what you’ll use to apply for tax-exempt status, hire employees, and open a bank account. If you want to spend your time doing something else, like getting your nonprofit in order, consider ZenBusiness’s EIN service.
Apply for necessary licenses and permits
Depending on the nature of your nonprofit, you may need to get specific licenses or permits at state and local level. These requirements depend on where your nonprofit is headquartered and where it operates across the state. You can search Oregon’s license directory online for more details, or contact your municipal or county clerks.
There’s no central repository for determining what licenses you need. Since they vary between industry and location, you can use online services such as ZenBusiness’s business license report service to help keep your nonprofit up to date with all its licensing and permit needs.
Apply for Tax-Exempt Status with the IRS
Applying for tax-exempt status is the last big step before getting your nonprofit off to a running start. To be recognized as a 501(c)(3) nonprofit by the IRS, you’ll need to file Form 1023. There’s a long version and a short one. Fill out the one that best meets the needs of your nonprofit.
Keep in mind that there’s specific language you need to use for the IRS. You can find it on their website.
Register your nonprofit as a charity in Oregon
Depending on your nonprofit corporation’s structure, you may need to register with the Charitable Activities Section of the Oregon Department of Justice. For example, if you filed your Articles of Incorporation as a nonprofit public benefit corporation, registration with the Oregon DOJ is required. The following kinds of nonprofits aren’t required to register:
- Churches, houses of worship, or other religious organizations
- Mutual benefit nonprofit corporations
- Educational organizations that do not own property in Oregon
Apply for applicable insurance
You’ll need to get the required insurances for the type of nonprofit you’ve created. If you intend on hiring employees, you’ll need to have workers’ compensation and unemployment insurance. Speak with a professional insurance agent to determine your specific requirements.
Open a bank account
Last, you’ll want to open a bank account for your new nonprofit. When you apply for your account, have your nonprofit’s EIN on hand. They may also ask for copies of your bylaws and Articles of Incorporation. It’s best to call ahead to see what they might need.
Ready to Kick Start Your Business?
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service, want to reserve a business name, or 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.
Oregon Nonprofit Corporation FAQ
Can the founder of an Oregon nonprofit receive a salary?
Absolutely. Founders who work as employees are permitted to pay themselves a reasonable salary for the work they do.
What happens if an Oregon nonprofit makes money?
Any money earned by a nonprofit must be reinvested into the nonprofit or used to cover expenses related to the nonprofit.
What kinds of businesses can be a nonprofit in Oregon?
A nonprofit refers to a charitable organization that includes museums, shelters, food banks, and churches. Other kinds of nonprofits include theater groups, amateur sports clubs, low-income housing organizations, and daycare centers.
Can Oregon nonprofits sell products?
Yes, nonprofits can sell products and partake in other activities to generate income.