04/06/2023
If you want to start a nonprofit organization in Virginia, you will need to follow some steps to ensure that your organization is legally compliant and eligible for tax-exempt status. Here is a comprehensive guide on how to file a nonprofit in Virginia:
1. Name your Virginia nonprofit. You will need to choose a unique and distinguishable name for your organization that is not already in use by another entity in Virginia. You can check the availability of your desired name on the Virginia State Corporation Commission (SCC) website. You may also want to reserve your name for 120 days by filing a Name Reservation Application (SCC631) and paying a $10 fee. This will prevent others from using your name while you prepare your incorporation documents.
2. Choose a registered agent in Virginia. A registered agent is a person or entity that agrees to receive legal notices and official correspondence on behalf of your nonprofit. Your registered agent must have a physical street address in Virginia and be available during normal business hours. You can choose an individual who is a resident of Virginia or a member of your organization, or you can hire a professional registered agent service like Northwest Registered Agent.
3. Select your directors and officers. Your nonprofit must have at least one director who is responsible for overseeing the management and policies of your organization. You may also have additional directors who serve on your board and make collective decisions for your nonprofit. Your directors must be at least 18 years old and act in the best interest of your organization. You will also need to appoint officers who handle the day-to-day operations of your nonprofit, such as a president, secretary, and treasurer. Your officers may or may not be directors as well.
4. Adopt bylaws and conflict of interest policy. Your bylaws are the internal rules and procedures that govern how your nonprofit operates. Your bylaws should include information such as the purpose and mission of your organization, the roles and responsibilities of your directors and officers, the frequency and procedures for board meetings, the process for electing and removing directors and officers, the membership criteria and rights (if applicable), and the method for amending the bylaws. You should also adopt a conflict of interest policy that outlines how your nonprofit will handle any situations where a director, officer, or employee has a personal or financial interest that may conflict with the best interest of your organization.
5. File the Virginia Articles of Incorporation. To register your nonprofit with the state, you will need to file the Articles of Incorporation of a Virginia Nonstock Corporation with the SCC. You can file this document online or by mail. The articles of incorporation cost $75 to file. To ensure that your nonprofit is eligible to apply for 501(c)(3) status with the IRS, you must explicitly state the following in your articles of incorporation:
https://scc.virginia.gov/getattachment/720789db-bb07-433a-9c8c-432a69a4d8f3/scc819.pdf
- The name and address of your nonprofit
- The name and address of your registered agent
- The number of directors or the method for determining the number
- The names and addresses of the initial directors
- The purpose for which your nonprofit is organized
- A statement that your nonprofit will not engage in any activities that are not permitted for a 501(c)(3) organization
- A statement that upon dissolution, your nonprofit will distribute its assets to another 501(c)(3) organization or a governmental entity
6. Get an Employer Identification Number (EIN). An EIN is a nine-digit number that identifies your nonprofit as a tax-paying entity. You will need an EIN to open a bank account, apply for tax-exempt status, file tax returns, and hire employees for your nonprofit. You can obtain an EIN for free from the IRS online, by mail, or by fax.
7. Apply for 501(c)(3) status with the IRS. If you want your nonprofit to be exempt from federal income tax and be able to receive tax-deductible donations from individuals and corporations, you will need to apply for 501(c)(3) status with the IRS. To do this, you will need to file Form 1023 or Form 1023-EZ, depending on the size and complexity of your organization. Form 1023 is a long and detailed application that requires extensive information about your nonprofit's activities, finances, governance, and compliance. Form 1023-EZ is a shorter and simpler application that is only available for nonprofits with annual gross receipts of less than $50,000 and total assets of less than $250,000. Both forms require a filing fee: $600 for Form 1023 and $275 for Form 1023-EZ.
8. Register with the Virginia Department of Taxation. Even if your nonprofit is tax-exempt at the federal level, you may still be required to register with the Virginia Department of Taxation to collect and remit sales and use taxes, if applicable. You can register online or by mail, and you will need to provide your EIN, your Virginia nonprofit corporation number, and other information about your nonprofit's activities.
9. Obtain any necessary licenses and permits. Depending on the nature of your nonprofit's activities, you may need to obtain licenses or permits from state or local government agencies. For example, if you plan to solicit donations in Virginia, you may need to register with the Virginia Office of Charitable and Regulatory Programs and comply with the Virginia Solicitation of Contributions Law. You should research the requirements for your specific type of nonprofit and location.
10. Maintain compliance with Virginia nonprofit laws and regulations. Once your nonprofit is incorporated and registered, you will need to comply with various ongoing legal and regulatory requirements to maintain your nonprofit status. For example, you will need to file annual reports with the SCC, hold regular board meetings and document minutes, maintain accurate financial records, and follow state and federal laws related to employment, taxes, fundraising, and other areas. You may also want to consider obtaining insurance to protect your nonprofit from liability and risk.
