How To Start a Nonprofit in Connecticut in Nine Steps

Decide on a unique name for your organization that reflects its mission and isn’t already in use. You can visit www.ct.gov to see if any other business already uses your desired name. Next, search the internet to see if the name is being used as a domain name. Finally, check with the United States Patent and Trademark Office (USPTO) to ensure the name isn’t trademarked. You can do this by using the USPTO’s online trademark database.

Under Connecticut state requirements, you must appoint a board of directors with at least three board members to make critical decisions for the nonprofit. You should look for people passionate about the cause your nonprofit supports. These individuals should have experience that will help the organization, such as expertise in finance, law, fundraising, or the specific area your nonprofit focuses on. Consider diversity in backgrounds and perspectives, as this can lead to better decision-making and a more inclusive approach to achieving your goals.

For nonprofit formation in Connecticut, you need to file articles of incorporation, called Nonstock Corporation Certificate of Incorporation with the Secretary of State. You need information like the nonprofit’s purpose, address, email address, membership details, names and addresses of your initial board of directors, and registered agent service that will receive legal documents for your nonprofit. The filing fee is $50.

Within 90 days of filing the Certificate of Incorporation, you also need to file an Organization and First Report form to record the addresses and officers and directors of the corporation. The filing fee is also $50. You can file online by creating an account and logging into Business.CT.gov. You can also file by mail by sending your documents to Business Services Division, Connecticut Secretary of the State, P.O. Box 150470, Hartford, CT 06115-047.

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Bylaws are like the rulebook for your nonprofit corporation and help everyone understand how to run the organization. When writing bylaws, you should include key things like:

• The purpose of your nonprofit.

• How the board of directors is organized.

• Details about how board meetings are held.

• The roles and responsibilities of officers.

• Procedures for handling finances.

• How the bylaws can be changed in the future if needed.

Remember, your nonprofit must have bylaws to obtain tax-exempt status from the Internal Revenue Service (IRS).

Hold an initial board of directors meeting to set the stage for how your organization will run. During the meeting, you'll officially adopt the bylaws, elect officers, and decide who will take on specific responsibilities. It's a good time to discuss and approve the budget so everyone knows how money will be managed. Be sure to take notes, also called minutes, to record what was discussed and decided during the meeting.

You should get an EIN, which is like a social security number for your nonprofit. You need it to do important things like open a bank account, hire employees, and file taxes. You can apply for an EIN online through the IRS website, by mail, or by fax with an SS-4 form. Once you submit the form, you usually get your EIN right away if you apply online.

Tax-exempt status with the IRS allows your nonprofit to avoid paying federal income taxes and makes donations to your organization tax-deductible for donors. To apply for federal tax exemption status under the Internal Revenue Code, follow a few steps based on the type of organization you have:

• If your nonprofit is a 501(c)(3), which includes charities, religious, and educational groups, you'll need to file either Form 1023 or the simpler Form 1023-EZ. If you're eligible to use the 1023-EZ, you have to file it through the Pay.gov website.

• If your nonprofit is a 501(c)(4) social welfare organization, you should file Form 1024-A.

• For other types of tax-exempt organizations, like those under 501(a), you should file Form 1024.

Once approved, you’ll receive an IRS determination letter confirming your income tax exemption.

After the IRS grants your nonprofit tax-exempt status, you can apply for state tax exemptions by submitting a copy of your IRS determination letter to the Connecticut Department of Revenue Services. You may also need to fill out an additional application for recognition of exemption specific to Connecticut, depending on the type of taxes you seek exemption from. For example, qualifying exempt organizations may use Cert-119 to avoid paying state taxes on certain purchases for resale at one of five fundraising events during any calendar year. More information about specific tax exemption programs can be found on the Department of Revenue Services website.

Prior to doing any fundraising in Connecticut, nonprofits must complete a charity registration with the Connecticut Department of Consumer Protection (DCP) Public Charities Unit by completing the following registration requirements:

• Complete the initial charitable organization registration application

• Pay the $50 registration fee

• Provide a copy of the most recently filed IRS 990 form

• Submit a financial report (if your organization's revenue is more than $500,000)

If your organization hasn't completed its first fiscal year or filed its first IRS 990, you don't need to include financial documents with your application. You can apply online through the State of Connecticut’s eLicense website or by mail by sending the form and fee to Dept. of Consumer Protection, Attn: Public Charities Unit, 450 Columbus Blvd, Suite 801, Hartford, CT 06103.

Some charitable organizations, like certain educational institutions, may be exempt from filing a full registration and should instead complete an exemption form. You can learn more about whether your nonprofit is exempt from registering on the Department of Consumer Protection website.