To form a Rhode Island nonprofit corporation, there are certain steps to follow. We’ll show you how to do this and apply for tax-exempt status.
You need at least three members over the age of 18 who aren’t related. There are no residency requirements.
Choosing a name for your nonprofit is important. It needs to be memorable and signal what your nonprofit’s purpose is. The first thing you need to do is find out if another business is using it by searching the Secretary of State’s website. If the name you want is available, you can reserve it with the state for 120 days.
While you’re thinking about names, it’s a great time to make sure you find a domain name that aligns with your nonprofit name. Once you have one, let us help you with your domain registration service.
A registered agent, called a resident agent in Rhode Island, is someone who accepts documents from the state’s agency of formation as well as legal documents, such as subpoenas. They must have a physical address in Rhode Island, be an official state resident, and be available during standard business hours.
You can choose to be your own registered agent, but that ties you to a specific place for long periods of time. Alternatively, you can have another individual or business entity serve as a registered agent for your business. ZenBusiness’s registered agent service can connect you with our registered agent partners, who will receive documents on behalf of your nonprofit, upload them to your dashboard, then forward them to the designated person at your nonprofit.
Next, you’ll need to fill out and file Articles of Incorporation. You can file online or via mail. The turnaround time is about a week when filing via mail or on the website. Filing in person has same-day service for a fee.
The bylaws you create for your nonprofit corporation govern how you handle business where your board of directors is concerned. They dictate the process for electing people to the board and establishing who ascends to the director position. They establish the rules by which your nonprofit will be governed and decide the term limits of directors and/or officers.
You don’t need to submit these to the state of Rhode Island, but you must have them for compliance and auditing purposes.
The purpose of the initial board meeting is to establish and accept the nonprofit’s bylaws. You’ll also establish the goals of the nonprofit organization, decide on a bank account, vote people into their positions, come up with policies on how to deal with issues, designate someone to record minutes, set up a record-keeping system, and create a policy to deal with conflict.
Determine what record-keeping system the nonprofit uses to maintain important records, such as the Articles of Incorporation, board meeting minutes, and other pertinent documents. Many use a records binder, while others use online services such as the cloud. Use what works best for you and keeps your information secure and easy to access. This helps when it’s time to file your nonprofit’s annual report.
The next step is to apply for your EIN number. You can get one through the IRS for free or use the ZenBusiness EIN Service to save yourself time. This number is assigned by the IRS to identify your entity. Nonprofits need this number to hire employees, file annual reports, or open a bank account.
Remember, it’s your responsibility to obtain any other business licenses or permits to open a nonprofit in your municipality of choice. There’s no central place to obtain this information, as there are federal, state, and local guidelines for different industries.
That’s where ZenBusiness can help. Our business license report will do all the work for you. You’ll know exactly what permits and licenses you need to be in compliance with the law.
Many nonprofits use the 501(c)(3) designation. To do so, use Form 1023. There’s a long form and a short one, fill out the one that fits best with your nonprofit. After you fill out the form you can mail it to the IRS or submit it online. Once they approve your application, you’ll receive a letter of determination designating you as a nonprofit under the parameters of the IRS.
There’s certain language you need to use, so check the IRS website and make sure you fill out the form correctly.
After you get your 501(c)(3) designation, you can apply for exemption from the Rhode Island sales and use tax.
Use the Charitable Organizations Application to register your nonprofit as a charity with the state of Rhode Island. The cost to submit this application to the Department of Business Regulation is $90. You can submit your application online, paper filings are not accepted.
Include the address of the nonprofit, IRS Form 990, and the names of those soliciting donations on behalf of the nonprofit with your application.
If you plan to hire staff, your nonprofit must carry workers’ compensation insurance. You’ll also need unemployment insurance. Work with a qualified insurance agent to determine your specific needs.
The last step is to open a bank account. You’ll need your EIN, Articles of Incorporation, and information regarding your board of directors. Just in case, it’s a good idea to call ahead and ask what you’ll need to make sure 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.
A nonprofit corporate founder can receive a salary. However, the amount must be comparable to other similar nonprofits.
Despite the implication of the label, nonprofit corporations can — and do — make money. The revenue generated by a nonprofit goes to support its operating expenses.
The IRS generally accepts corporations that have some sort of public benefit as charities. These can include charities, religious institutions, scientific institutions, educational entities, entities that provide literary services, public safety entities, amateur sports entities, entities that emphasize services for children or animals (with the express purpose of preventing cruelty to either/both).
Nonprofit corporations can sell products if the activity in question is generating income that supports the nonprofit’s core purpose. For example, nonprofits that support children’s services can raise money through product sales if that money goes to the services in question.
Rhode Island Business Resources
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