NONPROFIT REGISTRATION ✅ BUSINESS ✅ SERVICES

Stage 1. Consultation and Selection of Organization Type

What the lawyer does:

Analyzes the goals and activities of the future organization.
Recommends the optimal NPO type (e.g.: 501(c)(3), 501(c)(4), others).
Advises on requirements for board of directors, bylaws, membership, etc.

Stage 2. Preparation and Filing of Incorporation Documents

What the lawyer does:

Prepares Articles of Incorporation according to state requirements.

Includes special language required for future IRS filing (e.g., tax exemption provisions).

Files documents with the Secretary of State (in chosen state).

Cost: $500–$1,000
State fee: $30–$200 (varies by state)

Stage 3. Obtaining EIN (Employer Identification Number)

What the lawyer does:

Completes and files SS-4 form with the IRS.
Obtains EIN for opening a bank account and filing tax forms.

Stage 4. Preparation of Internal Documents

What the lawyer does:

Develops Bylaws (internal governance rules).
Prepares the first minutes of founders/board of directors meeting.
Advises on liability issues, directors' duties, voting procedures, etc.

Stage 5. Filing for Tax-Exempt Status

What the lawyer does:

Files Form 1023 (or short version 1023-EZ for small NPOs).

Prepares required attachments: activity description, financial projections, policies (e.g., conflict of interest).

Communicates with IRS regarding any requests (Request for Additional Information).

Timeline:

Preparation: 1–3 weeks

IRS review: 1–6 months (typically ~90 days)

Cost:

Legal services: $1,500–$3,500

IRS fees:

$275 (for Form 1023-EZ)

$600 (for full Form 1023)

Legal Status of Nonprofit Organizations

A nonprofit organization in the US isn't just "not for profit." It's a structure created for public benefit: education, science, culture, helping vulnerable groups, environment — the list is extensive. The main idea — public purpose, not generating income for founders.

Available Forms (and Their Benefits)

501(c)(3) — most well-known: charitable and educational organizations. Often receive federal tax exemption and attract donations with tax deductions for donors.
501(c)(4) — social welfare organizations and political initiatives (limited tax benefits).
501(c)(6) — business leagues, chambers of commerce, unions, and professional associations.

There are other subcategories — each with specific purposes, rules, and tax implications.

Requirements for Establishment

articles of incorporation with clear mission statement;
board of directors — oversight mechanism;
rules prohibiting profit distribution to members;
state registration + IRS application for exempt status (if seeking 501(c)(3)).

Tax Benefits — Real and Important

federal income tax exemption (upon IRS approval);
tax deductions for donors (with 501(c)(3));
access to grants and discounts;
local and state benefits — in some cases.

But it's not a "free ride": status must be maintained — reporting, transparency, and profit distribution restrictions.

Limitations and Prohibited Activities

active political campaigning may jeopardize status;
personal enrichment of leadership — red zone;
non-compliance with reporting leads to penalties and loss of benefits.

Nonprofit status is a privilege with responsibilities: transparency, reporting, and strict fund usage restrictions.

Practical Advice

draft a clear mission statement — your protection and guide;
appoint a responsible board of directors;
maintain donation and expense records — transparency protects during audits;
plan funding models: grants, donations, fee-based services (with limitations).

Summary

Nonprofit status provides access to grants, tax benefits, and reputation as a community-serving organization. But it's not about "convenience" — it's about responsibility, accountability, and long-term commitment to the mission. A properly established and managed nonprofit becomes a powerful tool for real change.