How To Start a Nonprofit in Delaware in Eight Steps

When establishing a charitable organization, you must have a mission statement that sets forth your charitable purpose. The name of your nonprofit should align with your mission and be unique.

To determine if your name is available in Delaware, go to the Delaware Division of Corporation’s Business Name Database and search for the name. You will also want to check the name on the Internet or through a domain name registration search tool such as ICANN Domain Names Registration Lookup to make sure no one else is using the name as their domain name. If you want to use this name for a website, you should register it as a domain name.

Also, be sure the name you choose is not protected by a registered trademark. The United States Patent and Trademark Office (USPTO) website has a name search registry so you can check if the name is trademarked. If it is available, you can use the name. If you want to prevent others from using your name, you can register it as a trademark.

You will need a board of directors to help you govern your organization. Your board members direct the nonprofit activities and review bylaws, financial statements, and policies. They must act in the best interests of the nonprofit, which is called a fiduciary duty, and avoid conflicts of interest. In Delaware, you only need one board member for a nonprofit, but if you want federal 501(c)(3) tax-exempt status, you must have a minimum of three board members.

When choosing board members, look for community leaders or people with expertise or who share your mission’s passion. They can help get your new nonprofit off the ground and with fundraising and networking.

To form a Delaware nonprofit corporation, you must file a Certificate of Incorporation for Exempt Corporation.

You will need to include the following information:

• Name of the corporation

• Name and address of the registered agent

• A statement that the corporation is an exempt nonprofit corporation

• Name and address of the incorporator

If filing by mail, the filing fee is $109 (plus $9 for each additional page). Make the check payable to the Delaware Secretary of State. Mail the form to Delaware Division of Corporations, 401 Federal Street—Suite 4, Dover, DE 19901. You will need to attach a cover letter along with your filing. You can also file the certificate online with Delaware.gov. If filing online, you do not need a cover letter.

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Your nonprofit corporation must maintain bylaws and have directors and officers sign a conflict-of-interest statement. Corporate bylaws are the rules and procedures for running your organization. For example, your bylaws may contain rules for meeting times and voting procedures and the defined officer’s roles and responsibilities. A conflict-of-interest statement is where the officers and directors pledge they will avoid self-dealing and act in the best interest of the organization.

At the first organizational meeting with your board of directors, you will ratify the incorporation, adopt the bylaws, elect officers, and handle any administrative tasks. As part of corporate due diligence, you should hold regular board meetings and keep minutes of your meetings.

You will need an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number identifies your organization for tax filings and is used when opening bank accounts. To apply for an EIN, go to www.IRS.gov and complete Form SS-4. There is no cost for the filing.

The IRS requirements allow you to apply for tax-exempt status if your corporation has a charitable purpose. To file for tax-exempt status, you must complete the form for your type of nonprofit entity as defined by the Internal Revenue Code.

• If you have a 501(c)(3) charitable, religious, and educational nonprofit organization, file Form 1023 or Form 1023-EZ. If your nonprofit can file the 1023-EZ, use the Pay.gov site.

• If you have a 501(c)(4) social welfare organization, file Form 1024-A.

• If you have another tax-exempt or nonprofit organization, such as 501(a), file Form 1024.

The IRS will then send a determination letter confirming your organization’s tax-exempt status. Keep this letter with your certificate of incorporation, corporate records, and other legal documents.

If you have employees, you must register your nonprofit with the Delaware Division of Revenue and withhold Delaware State income taxes on your employees who work in Delaware. You should also register with the Delaware Department of Labor. Delaware has an online portal, OneStop, to do these registrations. If your nonprofit is a private foundation, you also must file a copy of Federal Form 990 PF with the Delaware Attorney General.

Fortunately, In Delaware, there is no state sales tax, so you do not have to apply for state tax exemptions. If you qualify for federal tax exemption status, you do not have to pay state income tax. Additionally, there is no requirement to get a business license for your nonprofit.

Unlike some states, you do not have to register your nonprofit if you engage in charitable solicitations.