How To Start a Nonprofit in Montana in Eight Steps

The first thing you should do is come up with a business name that promotes your organization’s purpose. Choose something unique that distinguishes your startup nonprofit from other businesses. You can use the Montana Secretary of State’s Business Search to confirm name availability.

Also, check the United States Patent and Trademark Office (USPTO) trademark database to ensure the name has not already been registered as a trademark. Finally, determine whether you can use the name for your website. You can search for it online to verify it isn't already taken as a domain name.

The board of directors of a nonprofit is like the group of people who help manage the organization's money and make big decisions. They make sure that people trust the organization and that it reaches its goals. Under Montana state law, nonprofits must have at least three people on the board. When choosing your board of directors, look for individuals who:

• Have valuable skills and experience (like fundraising or managing money)

• Are good leaders

• Understand the community

Remember, you want directors who care about your nonprofit’s cause. They owe a fiduciary duty of care and loyalty to the nonprofit’s mission.

You must file Articles of Incorporation with the Montana Secretary of State to officially create your nonprofit. There is specific information you must include in your articles, such as:

• Nonprofit’s name

• Registered agent (or commercial registered agent service) name and physical address (and mailing address in Montana if different)

• Name and address of each incorporator

• Type of corporation (public benefit, mutual benefit, or religious) and whether it’s with or without members

• Whether nonprofit is or is not applying for 501(c)(3) status with the Internal Revenue Service (IRS)

• Nonprofit’s phone number and email address

Each incorporator (and director if they have been elected) must sign the Articles of Incorporation. To file online, you must visit https://biz.sosmt.gov and create an account with the Montana Secretary of State Online Filing Portal. To file by mail, send your articles to Secretary of State, P.O. Box 202801, Helena, MT 59620-2801. The filing fee is $20. If you have any questions, you can call Business Services at (406) 444-3665. Business days are Monday through Friday from 8:00 a.m. to 5:00 p.m.

Or you can let our trusted partner LegalZoom handle your nonprofit creation starting at $99 plus filing fees.

Nonprofit organizations need a set of rules called bylaws and a conflict-of-interest policy. Bylaws explain how things should be done, such as:

• When and how meetings happen

• Election procedures for choosing officers

• Voting process for making decisions

Bylaws help everyone know what to expect and keep the organization running smoothly. The conflict-of-interest policy ensures that the people in charge, like board members, always act in the best interest of the organization and do not do things that would benefit themselves unfairly. This policy is important because it helps keep the organization honest and trustworthy, which is necessary to receive tax exemptions from the government.

When your nonprofit corporation is getting started, hold your first organizational meeting with the board of directors. This meeting lays the groundwork for how the nonprofit will run. During this meeting, board members discuss and approve the bylaws, elect officers like the president and treasurer, and handle administrative tasks, such as deciding on the nonprofit's goals and plans. Write down what happens in this meeting, called the minutes, so there's a record of decisions and actions taken. Keep these notes with your business records and other important legal documents.

An EIN is a unique ID number for businesses, similar to how people have social security numbers. Nonprofit corporations need an EIN to do things like open a bank account and fill out tax forms. To get an EIN, you can visit the IRS website and fill out an online SS-4 form. It’s pretty simple and once you finish, you'll receive your EIN right away. Best of all, applying for an EIN is free!

The Internal Revenue Code allows different types of nonprofits to avoid paying federal income taxes on the money they earn by applying for tax-exempt status. How to apply depends on which of the following IRS forms your nonprofit should file:

• If the nonprofit is a charity, religious group, or educational organization, it usually files Form 1023 or the simpler Form 1023-EZ if they qualify. You can file online using the Pay.gov site.

• For social welfare groups, used Form 1024-A.

• Other types of nonprofits, like those under section 501(a), should fill out Form 1024.

Once the IRS approves your filing, you will receive a determination letter showing your nonprofit is an exempt organization.

Nonprofits that qualify for federal tax exemption may also be eligible for state income tax exemption in Montana. To apply, download and complete the Tax-Exempt Status Request Form for Income Taxes. You must provide a copy of your IRS determination letter or exemption certificate. Otherwise, you must submit the following:

• Affidavit outlining your nonprofit’s purpose, activities, and income

• Articles of Incorporation

• Bylaws

• Your most recent financial statement

Mail your application to the Montana Department of Revenue, Corporate Income Tax Unit, PO Box 5805, Helena, MT 59604-5805. Or you can fax the application to (406) 444-2900. Montana does not have a state sales tax, so there’s no need to apply for a sales tax exemption.