Nonprofit FAQs | Frequently Asked Questions About Nonprofits | Swyft Filings
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Frequently Asked Questions

Nonprofit FAQs

  • What is “tax exempt status”, and how can your Nonprofit acquire it?

    As most Nonprofits are typically founded with the main goal of benefitting the general public, Nonprofits can become "tax exempt" entities. This means that they are free from paying a vast majority of the taxes that are levied on other types of organizations.

    However, Nonprofits are not granted tax-exempt status automatically upon formation. After the organization is successfully formed with its state, it must file Form 1023 with the IRS to receive tax exempt status. There may also be some state level filing required to become tax exempt at the state level, depending on where your organization is located.

  • Does Swyft Filings assist with helping my Nonproft receive “tax exempt” 501(c)(3) status?

    At this time we do not offer this service.

  • What formal paperwork must be filed when forming a Nonprofit?

    A special set of documents called the Nonprofit Articles of Organization must be filed with the relevant state agencies in order to become formally recognized. The appropriate agency will change depending on where you are forming your organization. There may also be some fees or franchise taxes that must be paid during this process.

    A filing service such as Swyft Filings can take care of the required filings for a Nonprofit. This allows you to focus on developing and growing your new organization.

  • Are there any restrictions on who can file to form a Nonprofit?

    There are no restrictions as to who can form a Nonprofit organization.

  • Is an attorney required during the Nonprofit filing process?

    An attorney is typically not required when starting any type of business or a Nonprofit organization. However, a business filing service such as Swyft Filings can help you streamline the formation process and save you a great deal of time and effort. If you are unsure of which business structure may be right for you, or you have questions regarding specific tax or organizational issues, it may be advisable to speak with an attorney or accountant before starting a new business.

  • How should I name my Nonprofit?

    Your organizations name must be unique and not deceptively similar to any other trademarked name or business. It is also required that your name not intentionally misrepresent the products or services you offer. For Nonprofits, most states require a signifier of your corporate status, such as “Company”, “Corporation”, “Incorporated”, or a relevant abbreviation to be added to your business name. Choosing a name for your Nonprofit is an important decision; it will be how you represent yourself the general public and to potential associates so take time to research and select a name that will accurately represent you and your business.

  • What are the different IRS classifications for Nonprofits?

    Although there are several Nonprofit classifications, the 501(c)(3) is by far the most common.  This is the classification that religious organizations, scientific institutions, amateur athletic groups, charities, and animal and child cruelty prevention organizations would use.  The other classifications for Nonprofit groups are rarely used and only apply to very specific types of organizations.  If you are unsure of which type of classification may be right for you, or you have questions regarding specific options, it may be advisable to speak with an attorney before starting your Nonprofit corporation. 

  • What are the “owners” of a Nonprofit officially called?

    Since Nonprofits cannot generate income (outside of regulated salaries) for any of their founders or workers, they do not have “owners” in the traditional sense. However, from a leadership standpoint, they are structured very similar to a corporation. They have a board of directors, who are responsible for making major decisions and electing officers. These officers are in charge of managing the organization’s day-to-day operations.

  • Are there a required number of individuals needed to form a Nonprofit?

    The typical rule is that Nonprofits must have at least three board members to receive tax-exempt status from the IRS. However, it is possible to form a Nonprofit with only one founder.

  • Where should I establish my new Nonprofit?

    It is possible to form a Nonprofit in any of the 50 states, as well as the District of Columbia. Many new Nonprofits do not realize that it is possible to form their organization in a state other than the one in which they live or operate.  However, through a process called “foreign qualification”, it is possible and often advisable. 

    If your Nonprofit operates only in a small area, it may be advisable to file within your state.  The main reason for this is that states may require Nonprofits that foreign qualify to pay additional taxes and fees which can be a financial burden for the organization.  There are also some logistical issues that are related to foreign qualification that may cause additional expenses.

    If your Nonprofit is large or operates on a large geographical scale, foreign qualification may be the best option. Each state has different tax and filing requirements so it may be advantageous for your company to foreign qualify.

  • Do all Nonprofits need a Registered Agent?

    All formal business entities, including Nonprofits, are required to have a Registered Agent on file with the state at all times. The agent may be an individual or company with a physical address located in the state of incorporation. Agents must be available at all times during standard business hours (9 a.m. - 5 p.m. Monday – Friday). The role of a Registered Agent is to receive any and all of communications from the government to the business. The agent’s name and address must be disclosed as part of the company’s public record.

    If you are foreign qualifying your business or wish to keep your contact information private, it may be wise to hire a professional Registered Agent service such as Swyft Filings. Our professional Registered Agent service ensures that your legal requirements will be fulfilled and that all communications will be relayed to your company in a timely manner.

  • Where can I find a reliable Registered Agent?

    Swyft Filings offers a professional Registered Agent service as well business filing services. Regardless of the state in which your business is located, we can provide you with Registered Agent services. Swyft Filings provides companies of all types and sizes an affordable solution that will ensure that they remain compliant with all Registered Agent requirements.

  • How can I start the Nonprofit incorporation process?

    The first step in establishing a new Nonprofit is to file Nonprofit Articles of Incorporation with the state in which you are establishing your organization. Once this has been completed, you will need to hold a documented organizational meeting with your initial board of directors. During this meeting you will need to adopt a written set of by-laws, approve formal resolutions establishing the organization’s initial financial accounts, and appoint officers. Please keep in mind that you will also need to apply for tax-exempt status with IRS.

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