In this guide, we’ll show you how to form a Washington nonprofit corporation and give you some tips if you’re considering applying for tax-exempt status.
Directors of a Washington nonprofit corporation must be individuals (as opposed to other corporations or entities). Nonprofits require at least one director, but you’ll need at least three people who are unrelated if you’re thinking about applying for federal tax-exempt status.
The Washington Nonprofit Corporation Act has specific restrictions when it comes to selecting a name.
To be sure the name you’re interested in isn’t already taken, you’ll need to run searches with the following departments or offices:
Got a name in mind that’s available? You can reserve it with the state for a fee.
While we’re on the topic of names, now’s the time to think about your domain name. Take a look to see whether the domain name you want is available and aligns with your business name. When you find one that fits your needs, use ZenBusiness’s domain registration service to secure one so you can start building your online presence.
A registered agent is a person or entity selected by the corporation to receive service of process and communication from the state. To be a registered agent in Washington:
While you can act as your own registered agent, there are disadvantages to consider:
Corporations will often work with a registered agent service as it allows them more freedom and less worry. ZenBusiness can put you in touch with our registered agent partners in the state.
Washington requires that your Articles of Incorporation include the following:
You can find the form on the Secretary of State’s website. You have the option to mail it in or take it in person. You can also file online by creating an account. Keep in mind that there’s specific wording you need to use if you plan on applying for federal tax-exempt status. More on that below.
Your corporation’s bylaws set the rules of operation. You’ll want to create the rules by which directors and officers are elected, their term limits, and how they resign or are removed.
They’re required by law but don’t have to be filed with the state. Instead, they should be kept in the office along with a record of any changes. If you’re applying for tax-exempt status, you’ll need to file them with the IRS.
During the first meeting, the board will need to approve the bylaws and act on the remaining actions needed to complete the nonprofit’s launch. Some of these items may include:
The board’s secretary typically records the minutes. The nonprofit should keep minutes in an electronic format or a binder.
Create a process for securely filing and organizing your nonprofit’s official documents. You can do this with a records binder or an online storage option like the cloud. This can help you build trust and transparency with various partners including donors and other financial contributors. It can also help you stay organized for compliance or business assessment needs.
Consider coming up with a document retention policy. This policy will detail what records need to be kept and for how long.
One of the Tax ID numbers you’ll need to apply for is known as an Employee Identification Number (EIN). An EIN is required if you’re planning to file for tax-exempt status, hire employees, or open a bank account.
ZenBusiness offers an EIN registration service as well, to take one more task off your plate.
A nine-digit Unified Business Identifier (UBI) will also be issued to your corporation once the Articles of Incorporation have been approved. You’ll need a UBI to conduct taxable business in the state of Washington and to register with the Department of Revenue.
There are a number of places that you should review to determine which licenses and permits you might need. You’ll need to do careful research, as information on licensing requirements can be in several different places. Because licensing can operate at multiple government levels and/or be industry-specific, there isn’t just one place that holds all the information.
To make the process less stressful, you can use ZenBusiness’s business license service to see which licenses and permits you may need.
At the federal level, there are several tax-exempt statuses that might apply to your nonprofit. The most common form for nonprofits is IRS form 1023. Take a close look at the IRS website for types of tax-exempt organizations and their requirements for qualification. You can find out more on the IRS’s website.
Washington doesn’t offer a tax-exempt status for nonprofits.
Registration as a charity is done with the Secretary of State. Charities planning to solicit donations and who raise more than $50,000 will need to register.
Your nonprofit will need workers’ compensation and unemployment insurance if you have employees. Some nonprofit corporations also obtain directors’ and officers’ liability insurance.
Insurance needs vary, so we recommend contacting a qualified insurance agent to help you figure out your specific insurance needs.
To open a bank account for your nonprofit, you’ll need to have your EIN and Articles of Incorporation on hand. Call ahead and ask what else they’ll need.
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, a nonprofit founder can receive a salary. However, the salary must be in line with salary or compensation for similar roles in Washington.
If a nonprofit makes money, the amount needs to be reinvested in the organization and its goals.
Nonprofits can vary a great deal in terms of the types of business they conduct. However, the general rule is that they can’t conduct business to generate a profit.
Yes, nonprofits can sell products but there are some limitations to this so it’s best to check the Washington Nonprofit Corporation Act. Also, while it’s permitted by state law, a nonprofit’s Articles of Incorporation or bylaws may not allow it.
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