How to Start a nonprofit corporation in Georgia

Now that you have decided to start a nonprofit, you need to determine the charitable mission and purpose for the business. In order to comply with IRS regulations, it's important that your business is organized for an exempt purpose. Your business may not engage in political activities and must not overcompensate its members.

The next step will be to decide on a name for your business. Choose a name that is memorable and unique, easy to understand and pronounce, and accurately represents your nonprofit organization. You'll want to search your name choices online to quickly find out if they are already taken. It's also best to jot down one or two alternatives, in case the name you settle on is not available for registration in Georgia.

The Georgia Secretary of State offers nonprofit corporations the ability to reserve their business name, if the name is not currently in use. You can find out whether a name is available by conducting a business name search Opens in a new tab through the Georgia Corporations Division. If the business name is free, you may fill out an application and pay a $25 filing fee to reserve the name for 30 days.

You can learn more about Georgia business name registration rules and regulations Opens in a new tab through the Georgia Corporations Division within the Georgia Secretary of State.

Most states require that you designate a registered agent for your business, and Georgia is no exception. A registered agent (often abbreviated as RA) acts as the state's means to communicate with a business. An RA is responsible for receiving legal and official documents related to the business. This may be an individual or third party service that agrees to accept legal papers on the corporation's behalf. A corporation may not act as its own registered agent for service of process.

In the state of Georgia, it is required that each entity continuously maintains a registered agent Opens in a new tab and registered office. The registered agent can be anyone you wish, but whoever you choose must have a physical address in Georgia. In other words, a P.O. Box is not allowed as a registered agent address. This means a member of the nonprofit corporation can act as the registered agent if desired, or a third-party registered agent service like MyCorporation can be used.

Registered agent information is publicly available. This may cause privacy concerns for business owners who do not wish to list their personal contact information for everyone to see. It is also common for the registered agent to become a target of spam or robocalls since this private information is relatively easy to obtain.

Registered agents are highly valued for their discretion. For example, if you did not have a registered agent and your business was served with lawsuit paperwork the documents would be delivered directly to your business address. This could be incredibly embarrassing for the business owner, especially if this happened in front of customers.

An RA will accept the documents privately to ensure additional privacy, organize the materials, and then deliver them to the business owner. This is why many business owners opt for a third-party registered agent service like MyCorporation to act as a registered agent on behalf of their business.

In the state of Georgia, the process for filing Articles of Incorporation is the same for nonprofit corporations as it is for profit corporations. The exact same information is required in applications and the same filing fees apply.

Each Articles of Incorporation prepared for the Georgia nonprofit corporation must contain the following information:

1. The name of the corporation.
2. Number of shares the corporation is authorized to issue.
3. The registered agent's legal name, street address, and county.
4. Legal name and address of each incorporator.
5. Mailing address of the corporation's principal office (if different from the registered office).

The filing fee to file the articles by mail is $100 and $110 for hand delivery (the additional $10 covers the paper filing service charge). Checks or money orders must be made out to the Secretary of State.

What information should be included in the Articles of Incorporation?

As noted above, information required in the Articles of Incorporation covers basic information as it pertains to the Georgia Nonprofit Corporation. Please remember to have an incorporator within the corporation sign and date the articles of incorporation.

Bylaws are the detailed set of rules agreed upon and adopted by the board of directors of the nonprofit. Think of these as an instruction manual to run the business. They include rules and procedures related to meetings you will hold, and notes on the ways you will elect officers and directors of the business.

While a nonprofit corporation is not legally required to create bylaws in Georgia, it is highly recommended. Bylaws help maintain consistency in the way your business operates, as well as communicate organizational rules that help avoid conflicts and disputes. Bylaws are for your records only and are not submitted to the state.

If you are not sure how to create corporate bylaws, you can purchase MyCorporation's customized Minutes and Bylaws package. Inside our package you will find internal documents required to fulfill your corporate formalities and properly operate your business after it has been incorporated.

The first board meeting for your business is often referred to as the organizational meeting of the board. During this meeting, the initial directors of the business will adopt the corporate bylaws, set the fiscal year, and appoint corporate officers.

This meeting and all future meetings of the board of directors must be recorded in corporate minutes. Minutes are documents that detail what was discussed and any decisions the business makes during meetings. They are kept with the corporate records.

Corporate minutes are required for all Georgia nonprofit corporations. Falling behind on this critical task can cause your business to fall out of good standing, and even jeopardize its tax-exempt status. It is important to maintain a corporate minute book. Inside you may keep originals or copies of all the signed and approved minutes or Actions by Unanimous Consent from any special or annual meetings of the corporation's shareholders and directors.

An EIN (also referred to as a Federal Tax ID) is a nine-digit number that is issued by the IRS and used to uniquely identify your business for tax purposes. Think of it as a Social Security Number (SSN) for your business, except an EIN is less sensitive. Like an SSN, an EIN allows you to:

• Open business checking, savings, or investment accounts
• File taxes for the business
• Complete payroll for employees if applicable
• Obtain lines of credit and credit cards, and build credit for your business
• Apply for applicable business licenses when required
• File for tax exempt status

You will only need a few pieces of information to file, including your mailing address and legal business name. You can apply online Opens in a new tab with the IRS by downloading IRS IRS Form SS-4 (PDF)(116 KB)Opens in a new tab, or work alongside a third party organization like MyCorporation to complete an EIN application.

Your nonprofit corporation is not automatically tax exempt. In order to become tax exempt, you will need to take certain steps to obtain this status. First, you will need to file for exempt status with the Internal Revenue Service using either Form 1023 (PDF)(866 KB) Opens in a new window or Form 1024 (PDF)(360 KB), depending on the classification of your organization.

In some cases, you may be eligible to file Form 1023-EZ Opens in a new window, a streamlined version of the application for recognition of tax exemption. You can avoid a $25 fee if you file for federal tax exemption before filing with the state.

Even if you have obtained federal exemption for your organization, you still need to submit an Exempt Application form (FTB 3500 Opens in a new tab) to the Franchise Tax Board to obtain state level exemption. Although most of Georgia's laws dealing with tax exemption are like those found in the Internal Revenue Code, obtaining state exemption is a separate process from obtaining federal exemption.

You can learn more about the process directly from Publication 557 from the IRS (PDF)(2.1 MB) Opens in a new tab.