What Are Articles of Incorporation? Why Does My Nonprofit Need Them?
It is important to contact the state office (usually the Secretary of State) responsible for incorporations to find out what the requirements are. Harbor Compliance provides a state-by-state directory where you can quickly check your state's requirements.
Many state offices will provide a packet of information about how to incorporate as a nonprofit and even samples of articles of incorporation or fill-in-the-blank forms that you can use.
States often require the following information in the Articles of Incorporation.
Your corporate name must be different from any other corporate name registered in your state of incorporation. Investigate your chosen name’s availability before filing for incorporation. Here is a guide to choosing a corporate name.
Type of Organization
Specify what type of nonprofit you’ll be registering for. Not all nonprofits are alike. For instance, a nonprofit cooperative is different from a nonprofit corporation. Check how the IRS classifies nonprofits, since you’ll be applying for tax exemption eventually. Charitable nonprofits are 501(c)(3) for tax-exempt purposes and would incorporate as a nonprofit corporation at the state level.
State your registered agent and office. A registered office is where your organization receives legal papers such as notice of a lawsuit or other legal notifications. Your registered agent is the person or company that receives those notifications. Use any physical address in your state but not a PO Box.
If your office is your home, or you are not often at your office, you can use a registered agent service to receive legal notifications.
Name of Incorporator(s)
You must have one incorporator at a minimum, but you also can have more. This is the individual(s) responsible for executing the articles of incorporation. An incorporator can be anyone as long as he/she is at least 18 years old. All incorporators must sign the articles of incorporation.
Designation as Stock or Non-Stock
Most charitable nonprofits do not issue stock to individuals. Should the nonprofit go out of business, any remaining assets would be donated to another nonprofit.
Whether Your Organization is Membership Based or Not
A nonprofit can decide whether to have members or not. A membership-based organization means that members can vote on crucial issues and they elect members of the board of directors. A non-membership nonprofit has more leeways since its board can make the decisions about how the organization is run, and the board appoints the CEO (often called an Executive Director) for the organization.
Names of Directors
Directors oversee the management of the nonprofit corporation. Members of a member-based nonprofit elect the directors.
The boards of non-member based nonprofits are usually self-perpetuating.
The board of directors elects new directors to fill vacancies in the board. The board of directors hires a CEO to run the organization on a daily basis. In the case of a volunteer-run nonprofit, the board appoints officers to handle day-to-day operations, such as a president, vice president, etc.
Nonprofit corporations must have at least one director. How many directors are required vary from state to state. See this guide to your first board of directors.
States often require a provision declaring the purpose(s) for which the nonprofit has been established. It is likely that you’ll need a statement that the nonprofit does not plan to seek a profit or benefit any particular person. Charitable nonprofits that plan to seek 501(c)(3) designation from the IRS are restricted to specific charitable purposes.
The Articles of Incorporation do not go into the details of how the corporation will be run. That is spelled out in the corporation's bylaws.
This article is just for informational purposes. It is not intended to be legal advice. Check other sources, such as the IRS, and consult with legal counsel or an accountant.