Forming a Non-Profit Organization
State of Tennessee Requirements
This information was taken from the Web site: http://www.state.tn.us/sos. The site contains a 63- page filing guide for nonprofit corporations, as well as copies of all the application forms.
To incorporate as a nonprofit corporation in Tennessee:
- There is a fee of $100. Once incorporated, you must file an annual report and pay a $20 annual fee.
- You must have a name that is distinguishable from any other name on file. You can make a preliminary check for name availability by calling
(615) 741-2286.
- Your Charter (Articles of Incorporation) must include a statement indicating that the corporation is a public benefit or mutual benefit corporation. Public benefit corporations have IRS 501(c)(3) tax exempt status. The document must be executed by the chairman of the board of directors, its president, another authorized officer, or an incorporator (if directors have not been selected). NOTE: Tennessee doesn't require a Charter but the IRS requires one certified by the State.
- The corporation must maintain a registered office and a registered agent in Tennessee. A registered agent is a person or legal entity designated to receive documents on the corporation's behalf.
NOTE: Tennessee statutes do not require the use of an attorney to incorporate, but it may be advisable. It takes only one person to act as the incorporator when a corporation is formed, but you are required to have a president and a secretary. Once the charter has been filed with the State, it has to be filed with the Register of Deeds in the county in which the corporation has its principal office.
To register as an organization that solicits donations for charitable purposes:
- You must complete SS-6001, Application for Registration of a Charitable Organization. A $50 fee must accompany your initial application.
- The registration must be renewed annually. You renew your registration with the same form, but the renewal fee depends on the gross revenue of the organization. For example, an organization with a gross revenue of up to $49,000 pays an annual filing fee of $100. (A late fee of $25 is assessed for each month, or portion thereof, that the application is late.)
- Part of the documentation required is a 10-year employment history of the organization's "control" or "key" person(s) in control of the day-to-day operation of the organization.
- The SS-6001 form must contain the signature of two authorized officers of the organization, and must be signed in the presence of a Notary Public. The officers must be two different individuals, and the signature of the Notary must be dated the same day as the signature of the officers.
- Charitable organizations receiving more than $250,000 annually have additional requirements.
NOTE: Be sure to use the same language in both your State and IRS (federal) applications.
IRS (Federal) Requirements
The IRS Code lists more than 30 different types of tax-exempt organizations. They are described in IRS Publication 557, Tax-Exempt Status for Your Organization. If you are planning to form a non-profit organization, you should obtain a copy of that 55-page publication.
This handout covers only how to form Section 501(c)(3) organizations, which qualify for exemption from federal income tax when organized and operated exclusively for one or more of the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and prevention of cruelty to children and animals.
- You must have a Employer Identification Number (EIN) whether or not you have employees. Obtain this number by completing Form SS-4, Application for Employer Identification Number.
You must complete Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. When completing this form you must:
- Attach Form 8718, User Fee for Exempt Organization Determination Letter Request and the appropriate fee: $150 if you have had or anticipate annual gross receipts averaging not more than $10,000 during the preceding or future four years; $500 if more than $10,000.
- Enclose the following financial statements:
current year plus the 3 preceding years
detailed breakdown of revenue and expenses (no lump sums)
submit proposed budgets for 2 years showing the amounts and types of receipts and expenditures anticipated (if the organization has been in existence less than 1 year)
- Your application must be accompanied by a conformed copy* of your organization's Articles of Incorporation (and the Certificate of Incorporation, if available), Articles of Association, Trust Indenture, Constitution or other enabling document. If the organization does not have an organizing document, it will not qualify for exempt status. By-laws alone are not organizing documents, but if you have adopted by-laws, include a current copy with your application.
- * A conformed copy is one that agrees with the original and all amendments to it. An officer must certify that the document is a complete and accurate copy of the original. DO NOT SUBMIT ORIGINAL DOCUMENTS, as they cannot be returned by the IRS.
- NOTE: Every attachment to Form 1023 should show your organization's name, address, and EIN; identify the part and line item number to which it applies.
- Your Articles of Organization must limit the organization's purpose to one or more of those for which exemption is allowed and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. Publication 557 contains several sample Articles of Organization.
- To qualify, the organization must be a corporation, community chest, fund, or foundation. An individual or a partnership will not qualify.
