How To Start a Nonprofit in Georgia

If you're considering starting a nonprofit in Georgia, you likely already have an idea for serving your community. But forming a successful and legally sound nonprofit also requires extensive business planning. Many of the steps for forming a nonprofit are uniform across states, but launching a public benefit organization in Georgia comes with some state-specific regulations, forms, and processes.

Nonprofit organizations have unique legal considerations due to their charitable nature, including pursuing tax-exempt status and registering with the state as a charitable organization.

You may need help starting and operating your nonprofit. This article guides you through the various steps of opening a nonprofit in Georgia.

You can also see our Nonprofit Organizations section for more information.

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What Is a Nonprofit?

Nonprofits are organizations formed to serve a charitable purpose. They differ from for-profit organizations in that they funnel profits back into the organization to further their mission—rather than to generate a profit.

You can organize your nonprofit as a limited liability company (LLC) or corporation. Most owners choose to create a nonprofit corporation. Limited liability companies and corporations are business structures that provide personal liability protection. This means your personal assets, like your house or car, aren't at risk if someone sues your business over a debt or obligation.

As you consider whether you'd like to form a corporation, keep one consideration in mind: Most nonprofit founders seek to make their organization tax-exempt under Section 501 of the Internal Revenue Code. For the Internal Revenue Service (IRS) to consider your nonprofit for this federal tax exemption, you must organize your business as a trust, association, or corporation.

There are many types of nonprofits, but the most common type is the 501(c)(3) charitable organization. 501(c)(3) organizations can qualify for tax exemption through the IRS. The following organizations are often classified as 501(c)(3) organizations:

• Youth centers
• Animal welfare organizations
• Religious organizations

Other types of nonprofit organizations include:

• Veterans' organizations
• Social or recreational clubs
• Trade associations
• Civic leagues
• Foundations

Nonprofits can focus on social, educational, literary, scientific, or other issues.

What Is the Difference Between Unincorporated Nonprofits and Incorporated Nonprofits?

Unincorporated nonprofits (sometimes called unincorporated associations) are less formally structured than incorporated nonprofits. These are usually comprised of people working together for the nonprofit's purpose without going through the process of formal incorporation. While unincorporated nonprofits still have a mission and a charitable purpose, they lack a corporation's legal standing and structure.

Conversely, nonprofit corporations are legal entities that have gone through the formal process of incorporation. This structure provides the organization with several benefits, including:

• Legal standing and recognition
• Liability protection for its members
• Ability to contract directly with third parties as the organization (instead of an individual person entering these contracts)

An incorporated nonprofit provides a more defined organizational framework benefiting 501(c)(3) governance.

What Are the Steps to Start a Nonprofit in Georgia?

Nonprofits can focus on social, educational, literary, scientific, or other issues.

1. Do Your Research

If you're going to run a nonprofit, you'll need to show that your charitable organization meets a need in your community. It's essential to demonstrate the need for your services when you seek grants and donations, so research the needs of the community you'd like to serve.

Next, research the nonprofits already in the area. Consider if the nonprofits adequately meet the community's needs or if there is a gap you can fill. Also, consider whether you can reach your goals by volunteering or partnering with an already existing nonprofit.

If, after conducting market research, you decide you'd like to move forward with your nonprofit, start thinking about your organization's purpose and vision. Once you understand these, you can draft a mission statement incorporating your vision, purpose, and goals.

2. Choose a Name for Your Nonprofit

Choosing a name for your nonprofit is a crucial first step. Start this process with a brainstorm and create a list of potential names for your organization. When you have your list, conduct a business name search and a trademark search through the Georgia Secretary of State Corporations Division.

You will also want to perform a federal search on the United States Patent and Trademark Office (USPTO) website.

The purpose of this search is to ensure you choose an available name. If you operate your nonprofit under a name already in use or trademarked, you could face legal problems.

Under Georgia law, the name of a nonprofit corporation must include the words "corporation," "incorporated," "company," or "limited." Alternatively, you could use an abbreviation for one of these or a similar term.

You can reserve a business name for 30 days if you're not ready to start your nonprofit officially. You can reserve up to three names (in case your first or second choices are already taken) for a $25 filing fee.

You will use the name you choose for your organization on your website, brochures, and other items. Ensure it's consistent with your mission statement and purpose. It should also be memorable and distinctive.

3. Appoint a Registered Agent

A registered agent is a person or company that can receive legal papers on your behalf. For example, if someone needs to provide you with legal documents as part of a lawsuit, your registered agent will receive the paperwork for you.

If you can't find someone who can serve as your registered agent, you can pay a company to provide registered agent services. The person or company that serves as your registered agent must be available to receive legal papers during regular business hours. They must also have a physical address in Georgia.

4. Select Directors and Officers

In Georgia, you must have a board of directors for your nonprofit organization. The board of directors has the task of overseeing operations. Choose the people who will serve as your organization's directors carefully. Keep in mind the requirements of the state of Georgia and the Internal Revenue Service (IRS).

Georgia requires that you have at least one director for your organization. But the IRS requires that the organization have at least three directors. If you plan to seek tax-exempt status, you should get three unrelated people to serve as directors for your organization.

A director for a nonprofit organization should be at least 18 years of age.

You'll also need to have officers for your nonprofit corporation. Often, the board of directors elects the officers. Officers are responsible for handling the day-to-day tasks.

5. Prepare Bylaws

Corporate bylaws are essential because they typically contain rules and procedures for your organization. In case of any disagreement, those in the organization can look to the bylaws for guidance. A court may look to the corporate bylaws to resolve a legal dispute.

Your bylaws should include the following information:

• Name and location of the corporation
• Names of directors and officers
• Duties of directors and officers
• Procedures for meetings
• Procedures for amending the bylaws

Often, the person who writes the bylaws is the incorporator (the person who files the articles of incorporation with the Secretary of State). But there is no requirement to file the bylaws with any agency. Store your corporate bylaws in a safe place after they're adopted.

6. File Articles of Incorporation

To form your nonprofit corporation, you must file articles of incorporation with the Georgia Secretary of State. Articles of incorporation typically include the following information:

• Name, location, and mailing address of the corporation
• Statement of purpose
• Name and location of registered agent
• Name of incorporator

There are other statements you should include in your articles of incorporation—particularly if you apply for tax-exempt status. For example, you should have a statement that your organization will not engage in activities unrelated to the express purpose of the organization. If you dissolve your nonprofit, you'll also need a statement that the corporation's assets will go to another 501(c)(3) corporation or the government.

Your articles of incorporation must also explicitly state that “the corporation is organized pursuant to the Georgia Nonprofit Corporation Code."

You must submit a $110 filing fee for your articles of incorporation. You also need to submit a transmittal information form with your filing. The transmittal information form is a certification that you have filed your articles of incorporation and will publish a notice of incorporation.

You must file the notice of incorporation the day of or the next business day after filing the articles of incorporation. It's best to publish the notice of incorporation in the county newspaper.

Include the following information in your notice of intent to incorporate:

• Name of the corporation
• Name of the registered agent
• Location of the registered agent

Once the newspaper has published your notice for two consecutive weeks, they will send you an affidavit (or written statement). You don't need to file your notice with the Georgia Secretary of State. But you should keep the affidavit for your corporate records.

Finally, you'll need to file your initial annual registration form. You must file this initial annual report within 90 days of incorporation. A $30 filing fee is also associated with the initial yearly registration for nonprofit corporations.

7. Apply for an EIN

You must apply for an Employer Identification Number (EIN) through the IRS. Your EIN is like a social security number but for your business. You will use this number for tax purposes, and you may need it to open a bank account for the corporation.

The fastest and easiest way to apply for an EIN is through the IRS website. You can also file Form SS-4 if you prefer to apply by mail or fax.

It's free to apply for an EIN through the IRS. When applying, make sure you use the official IRS website—some commercial sites charge a fee for an EIN.

8. Hold Initial Board of Directors Meeting

You should conduct the initial organizational meeting of your board of directors as soon as possible. Be prepared to record the minutes of this meeting—it will accomplish several critical pieces of business.

At the initial meeting, it's typical for board members to:

• Select officers
• Adopt the bylaws
• Pass resolutions, including opening a business bank account

The board may also approve corporate policies at this time.

9. Apply for 501(c) Status

If you believe your organization qualifies as a 501(c)(3) charitable organization, you can apply for federal tax exemption. If you're forming a nonprofit corporation, you must start the corporation before applying for 501(c)(3) tax-exempt status. Use IRS Form 1023 or IRS Form 1023-EZ to apply for tax-exempt status.

After you apply, the IRS will issue an acknowledgment notice saying they have received your application.

You will receive a determination letter once the IRS has reviewed your application. The determination letter will tell you whether the IRS has approved your request or if they need more information.

Applying for 501(c) status helps with income taxes and opens up funding opportunities. For example, securing and maintaining 501(c) status may help you secure grants. Grants are one of the primary ways to grow a nonprofit.

10. Apply for Georgia State Tax Exemption

Tax-exempt status at the federal level doesn't automatically exempt your organization from state sales tax. But most states recognize an IRS determination letter. To get tax-exempt status at the state level, you can file your determination letter (and any other required documents) with the Georgia Department of Revenue (DOR).

Although you may get tax-exempt status for income tax, Georgia handles sales and use tax differently. Georgia generally doesn't grant sales and use tax exemption to nonprofit organizations.

Only a few types of nonprofit organizations qualify for a sales and use tax exemption in Georgia. This means you'll likely have to pay tax on purchases and sales.

11. Register With Georgia Charitable Organizations

You may need to register your Georgia nonprofit as a charitable organization. This registration allows you to solicit donations for your organization. Most nonprofits rely on fundraising and grants to fund their missions.

Complete your charitable organization registration through the Charities Division of the Georgia Secretary of State. The application has a $35 filing fee.

You must renew your registration and pay a $20 renewal fee every 24 months.

12. Get Business Licenses and Permits

You may need a business license or permits to operate your Georgia nonprofit. The licenses and permits needed depend on the type of organization you're running and its location. Check with your local business licensing authority for requirements for your nonprofit.

Use the Georgia Chamber of Commerce directory to find the agencies that regulate business licenses in your county.

The Small Business Administration (SBA) also has a helpful tool you can use to find taxes, zoning laws, and licensing regulations for your business.

Nonprofits operating in Atlanta city limits can find business licensing requirements on the City of Atlanta Office of Revenue website.

13. Open a Bank Account for Your Nonprofit

You'll want to open a bank account in your nonprofit's name as soon as possible. The bank will need specific information about your nonprofit, including:

• Articles of incorporation
• Bylaws
• EIN

In some cases, you may need to provide a copy of your directors' resolution to open a bank account. A director's resolution is a document detailing your board of directors' decisions. It can be used to authorize certain actions in place of an official meeting.

Store your corporate documents in a safe place—you may also need them to complete other tasks for your organization.

How Much Does It Cost To Start a Georgia Nonprofit?

There are several expenses associated with forming a nonprofit corporation in Georgia. When you calculate the costs of starting your own Georgia nonprofit, be sure to factor in these common startup costs:

• Articles of incorporation: $110.00
• Notice of incorporation: $40.00
• Initial annual registration: $30.00
• IRS Application for Recognition of Exemption: $600.00 or $275.00 (depending on the form used—Form 1023 or Form 1023-EZ)
• State fees for Georgia Charitable Organization Registration: $35.00
• Business name reservation: $25

You'll also need to factor in the costs for registered agent services if you hire a company for this. You'll also need to consider the wages you're willing to pay contractors or employees if you plan to hire staff.

Include these initial and ongoing expenses in your operating budget. This is also a crucial area of your business plan.

How Do I Maintain Federal Tax-Exempt Status?

Getting your nonprofit to tax-exempt status takes much time, effort, and capital.

It takes hours to complete the Application for Recognition of Exemption, and it can take months for the IRS to process the application. If the IRS recognizes your organization as a tax-exempt organization, you'll want to do your best to maintain that status.

Familiarize yourself with the do's and don'ts for organizations exempt from federal income tax. For example, 501(c)(3) organizations can't support a political candidate. Also, 501(c)(3) organizations must operate within the purpose stated in the Application for Recognition of Exemption and other corporate documents.

You'll want to stay on top of renewals and annual requirements. For example, you must renew the Georgia Charitable Organization Registration every two years.

In addition to the yearly requirements applying to corporations generally, nonprofit corporations also must submit an annual information return to the IRS. Use IRS Form 990 to submit information to the IRS each year regarding the nonprofit's income, activities, and structure.

Need Legal Help Forming a Georgia Nonprofit?

Starting a new nonprofit in Georgia is not a quick and easy process. Getting help from an attorney can give you some peace of mind as you make big decisions for your nonprofit formation. Reach out to a Georgia business organization attorney to see how they can help you meet all the legal requirements for your nonprofit organization.

Another option is using our trusted, simple-to-use online business formation tool. This tool simplifies the process of creating your nonprofit and guides you through the federal, local, and state laws for your business.