There are certain steps to follow and the process can be confusing, but we’re here to help. We’ll show you how to form a West Virginia nonprofit corporation and apply for tax-exempt status.
The first step in forming a West Virginia nonprofit corporation is to select and recruit the initial directors.
The directors are the governing body of your nonprofit and are the primary drivers of your nonprofit’s success and mission. To meet IRS requirements, you’ll need to choose a minimum of three unrelated individuals. These individuals don’t need to live in West Virginia or have any special qualifications to be considered for the role.
Using West Virginia’s business name search, you’ll need to find a name that isn’t currently in use by another business entity in the state. The name of your corporation will also need to include the suffix “corporation,” “incorporated,” “company,” or “limited” or the abbreviated form of those words. For a full list of naming requirements for your nonprofit, see West Virginia’s laws on nonprofit governance.
You may want to reserve your entity’s name prior to filing. If so, you can do so with the state for up to 120 days.
While you’re thinking about names, this is the perfect time to find a domain name that aligns with your business name. Once you find one that’s available, use our domain registration service to secure it before someone else takes it.
A registered agent is a person responsible for receiving legal notices on behalf of your corporation and any documents from the Secretary of State. The appointed registered agent must be physically in West Virginia and have an office that operates during normal business hours.
This office requirement could make it difficult for you to act as your own registered agent. At ZenBusiness, we can help you find a registered agent that meets your needs. They’ll upload necessary documents to your dashboard and forward them to the designated person at your nonprofit.
One of the most important steps to becoming a nonprofit corporation is filing your Articles of Incorporation with the Secretary of State. You can find the form on their website, and filing fees though are waived for veteran-owned and young entrepreneur corporations. All methods of filing, payment options, and expedition choices are listed on the application. Once approved, you’re an official West Virginia nonprofit corporation.
You can find all the necessary information to include in your Articles by reading the West Virginia Nonprofit Corporation Act § 31E-2-202.
Bylaws are the governing document for your corporation. You’ll want to create the rules which determine how board members and directors are elected, their term limits, and how they’re removed or resign. West Virginia also requires a conflict-of-interest policy. This is in case somebody in an important role in your corporation has interests that conflict with those of your nonprofit. Conflicts of interest should be disclosed immediately, and a process must be in place to do so.
The first meeting of your board of directors will cover a lot of issues. At this meeting, you’ll ratify your bylaws and your conflict-of-interest policy. You’ll also elect and appoint officers and directors, designate a minutes keeper, decide on a bank account, and set your tax and fiscal year.
By now, you’ll have collected many important documents, such as your bylaws and meeting minutes. It’s extremely important to save and organize them to avoid headaches down the road. You can do this physically or digitally through a cloud service.
You’ll need to get an employer identification number (EIN) if you want to apply for 501(c)(3) status, file your taxes, open a business bank account, or hire employees. At the federal level, you must apply to the IRS. If you’d rather avoid the paperwork and put your energy into getting your nonprofit going, use ZenBusiness’s EIN service to make this process as smooth and stress-free as possible.
Your corporation must apply for tax IDs at both the state and federal levels. At the state level, you must register with the West Virginia State Tax Department, which will provide you with a state tax ID. Information about fees and where to send are included on the application.
Depending on what your corporation’s activities will consist of, you may need to obtain various licenses or permits from various levels of government. Many of these licenses are industry-specific. There’s no central location to check which permits and licenses you may need due to the complexity of this system. ZenBusiness offers a business report service that will report which licenses apply to your business in your area.
Applying for tax-exempt status with the IRS, also known as 501(c)(3) status, officially recognizes your corporation as a charity once accepted. You must fill out form 1023, there’s a long version and a short one. After filing, if approved, the IRS will send you a determination letter officially recognizing your tax exemption status.
West Virginia doesn’t require you to do anything extra to be exempt from state tax once you’ve obtained your IRS determination letter. If you want to read more about sales and use tax exemptions see the state’s tax website.
As a charity, you may wish to solicit donations from the public. To do this in West Virginia, you must register as a charity with the state annually.
The last major step is to acquire the necessary insurance for your nonprofit. There are basic insurances you’ll need, such as unemployment insurance and worker’s compensation if you have employees. You’ll need to contact a qualified insurance agent to determine your specific insurance needs.
To keep track of your nonprofit’s funds and keep them separate from your personal accounts, you’ll have to open a bank account. You’ll need your EIN and Articles of Incorporation. It’s best to call ahead and see if there’s any other documentation they might want so you have it 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.
The founder of a nonprofit, working as an employee, can receive a salary or fair compensation for work done on behalf of the corporation.
Money made by nonprofits can be divided into two categories: profit from “related” activities, and profit from “unrelated” activities. Related activities are anything associated with the primary purpose of the nonprofit. This income is non-taxable and may be used to pay employees and operating expenses. Nonprofits must pay tax on profits from unrelated activities like any other business.
To qualify for 501(c)(3) status, businesses must generally be formed for religious, literary, scientific, or educational purposes. They can also be formed for another purpose that benefits the community. Other forms of IRS classification are available for specific circumstances.
They can, provided the money earned is reinvested into the nonprofit.
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