How to Start a Nonprofit in Florida
You have a great idea for a nonprofit organization. You have a Board of Directors, statements of purpose, and a way to change the world for the better. And now you want to formalize the process and create a living, breathing nonprofit corporation in Florida.
Well, take a deep breath and get ready to follow a complicated process to create your dream.
The Florida statutes and rules governing nonprofits are very complex and require patience and great attention to detail, as well as professional advice and guidance.
This overview of Florida nonprofits will guide you through the various steps necessary to the formation of a nonprofit but are not a substitute for professional legal advice in this highly technical and complicated area of law.
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Types of Florida Nonprofit Corporations
There are no specific limitations to the types of nonprofit corporations that can be opened in Florida. The only limits are that the corporation has to be eligible for nonprofit taxation status. That status is generally limited to charitable organizations, churches and religious organizations, private foundations, certain political organizations, educational organizations, social welfare organizations, some social clubs, civic leagues, labor organizations, and business leagues.
Costs to Start a Nonprofit Corporation
It will cost a few dollars to start a nonprofit. There are various state filing fees, which will be noted in the appropriate sections below. In addition, unless you have a volunteer lawyer, you will have legal fees to pay. If you are opening a storefront of some kind, you may be dealing with state or local business licenses.
Step I: Create and Name Your Nonprofit Business
Creating a legally proper name and then protecting it is one of the first actions that the nonprofit needs to undertake. This is a process that can be complex and time-consuming, but it is essential for the nonprofit to operate legally in Florida.
The first thing you have to do is create a great name (that's up to you). Florida law requires that the company name be unique and different from any other company's name, whether the other company is a nonprofit or not.
In addition, Florida law requires that the name must contain a word or abbreviation that designates the organization as a corporation: “Inc.," “Corporation," “Incorporated," or “Corp."
So your first task will be to search the Florida Department of State, Division of Corporations corporate names database to make sure that the name that you have chosen is not in use by any other Florida company.
Corporation names that exist in other states and do not exist in Florida are permissible. However, if you want to register nationally or with another state, you will have to follow those procedures.
You cannot use your new corporation name until you actually receive your filing acknowledgment from the Division of Corporations.
Step II: Appoint a Registered Agent for Service of Process
Florida requires that every entity registered with the state appoint a registered agent to receive process (legal papers, etc.). This agent does not have to be a lawyer but is often the company attorney. The registered agent is registered with the Florida Secretary of State, who maintains an online list of all registered agents in the state.
The nonprofit may change registered agents at any time. The name and contact information for that agent will be in the incorporation papers that you file with the state.
Step III: Appoint Incorporators
Incorporators are the people who sign the initial Articles of Incorporation. You only need one person to do this, but you can have more than one.
Step IV: Own Your Name
Next, make sure that no one else can use it in business or on the internet. This means that you have to make sure that no one else is using that name. You do this by making sure that the Internet Domain Name is available. If it is available, grab it immediately (that will only cost a few dollars).
If you want to do business nationally, or you want to operate in several other states, you should trademark the nonprofit's name with the United States Patent and Trademark Office (USPTO). This process takes some time and money. The nonprofit's name is still protected as a common law trademark while that application is pending.
Once you receive your federal trademark, register it with the Florida Department of State. You may also trademark the name with just the state, without a federal trademark.
Now that name is yours, you can keep anyone else from using it, and it conforms to Florida law.
Step V: Establish a Board of Directors
Every Florida nonprofit must have a Board of Directors. Florida law requires that the Board be composed of three or more people over the age of 18, except that one Board member may be as young as 15. However, no Board member under the age of 18 is allowed to vote. The IRS also requires a Board of at least three people.
The Board should be chosen for skills that they can bring to the organization, including fundraising, expertise in the nonprofit's field of endeavor, and organizational skills. Board members must be “natural" people. There is no residency requirement.
Step VI: Create the Bylaws
Florida requires the creation of bylaws for any corporation. Bylaws are the internal rules of the corporation and must be adopted by the Board before the corporation can legally function.
Step VII: Hold the First Board Meeting
Once the Board is created, it should conduct its first organizational meeting as soon as possible. That meeting should discuss the role of the Board, adopt bylaws, appoint a registered agent for service of process, appoint corporate officers, begin the process of incorporation, and create statements of organizational purpose, at the very least.
Step VIII: Incorporate Your Nonprofit
Incorporating a nonprofit business entity in Florida follows completely different processes from incorporating a for-profit company.
The new nonprofit must be incorporated with the Florida Department of State—Division of Corporations.
All forms and instructions for filing the nonprofit incorporation forms are on the Division of Corporations website. That website also has for-profit incorporation information and links, so make sure you follow the correct procedures. Make sure you file nonprofit articles of incorporation.
The fee for filing nonprofit incorporation forms is $35. The filing fee for the registered agent is an additional $35.
You May Be Paying Taxes
Even though the new business is a nonprofit and therefore is not subject to business taxation, there are still numerous forms that you will have to fill out with the various federal and state tax agencies. Remember that the nonprofit is not taxed on business income but is still responsible for employment and most sales taxes. You may also be able to file for a nonprofit sales tax exemption.
Step IX: File for Your Federal and State Employer Identification Numbers (EIN)
You must file for an Employee Identification Number (EIN) on the Internal Revenue Service website. There is no fee for this.
You can then file your Form DR-1 Florida tax registration with the Florida Department of Revenue. There is no fee for this unless you also file for sales tax registration ($5). This is a consolidated tax site that will allow you to do any tax registration that you need to do, including registering as a nonprofit.
Step X: File to Register as a Nonprofit With the IRS and Florida to Claim Your Tax-Exempt Status
Federal: Before you file for your 501(c)(3), you have to file a Form 1023 with the IRS. This registers your organization with the federal government as a nonprofit. Smaller organizations (under $250,000 in total assets) may use Form 1023 EZ.
The filing fee for Form 1023 is $600.00. The filing fee for Form 1023-EZ is $275.
Form 1023 is detail-intensive and asks highly detailed questions about the nonprofit's organization, history, policies, finances, and everything else you can imagine. Take the time necessary to obtain all of the information to answer these questions completely and truthfully. Then, file the form.
If your nonprofit is granted 501(c)(3) status, you will receive a determination letter granting your federal tax exemption from the IRS within about a month (under normal circumstances). After you receive your IRS determination letter, you can then proceed to file for your nonprofit status with the State of Florida.
State Tax Exemptions: You need to apply to the state for your Florida exemption from state corporate income tax. You do this by filing copies of the nonprofit's articles, bylaws, and the IRS federal tax determination letter with the Florida Department of Revenue (see above). You will then receive your state certificate of exemption. There is no fee for this.
Other Business Taxes and Fees
If you are going to hire employees, you may have other state obligations. Under Florida law, you may be required to file for worker's compensation insurance. You may be required to pay unemployment taxes.
You may file for a local property tax exemption through your local county tax office. Even if you get this exemption, there will still be other annual filing obligations.
Charities Have Their Own Rules
If you are creating a charitable nonprofit corporation, you will need to register with the Florida Department of Agriculture and Consumer Services (FDACS) before you begin any fundraising, depending on the size and type of your venture. This is in addition to any other legal papers you have to file to create the nonprofit corporation itself. This registration must be renewed annually.
You will need to renew your nonprofit tax status annually, as well as your charitable organization status. You will also need to file an annual report.
Help Is Available
Any new business venture, including a nonprofit, will need legal help. Consider using a DIY nonprofit formation tool that will walk you through the registration process so that your nonprofit corporation is set up correctly and will be entitled to a federal tax exemption.
You can also contact a Florida business organization lawyer for help with starting your business.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.