There’s a new buzz word making the rounds of small business blogs and websites lately… social entrepreneurship. A social entrepreneur recognizes a social problem and uses entrepreneurial (i.e., business) principals to organize or create a venture aimed at achieving social change. This may take the form of a for-profit entity, but it’s also common in the NGO (non-governmental organization) and non-profit sectors.
If you are interested in establishing your own non-profit organization in Florida, the attorneys at Minott Gore can help. Here are a few steps to keep in mind.
1.Determine Your Mission
This goes without saying and is beyond the scope of legal advice. What is your non-profit organization’s purpose and mission? In order to qualify as a tax-exempt organization, your company must have a charitable purpose as defined by the Internal Revenue Service. What is your purpose? Who will your organization serve and benefit? How do you intend to raise funds? Ask yourself these questions before getting to the logistics of establishing your non-profit company.
2. Choose a business name and check its availability
A non-profit organization, like any other business, must have a unique name that is not identical to another corporate name already registered with the Florida Department of State. The name must include “Inc.” or “Corp.” even if you will not use that when doing business.
If you are planning to use a D/B/A or fictitious name for your organization, you must register the name with the Florida Department of State Fictitious Names Section. This is required for any name you will use that is different than the legal name that appears on your Articles (discussed below). It is now also required to publish the DBA/fictitious name in the newspaper of the county where the company has its principal place of business.
We would also recommend conducting a trademark name search for your non-profit, as you will want to have exclusive national rights to use the name in connection with your cause, goods or services. This is important in building your organization’s brand early on and in the long run.
3. Identify Your Directors
Your non-profit organization needs at least three directors of legal age, in order to seek tax-exempt non-profit status. In choosing your directors, be sure to explain what is required in their role as directors of the organization and what your expectations will be early on during the start-up stages.
4. Incorporate your Non-Profit Organization
Our attorneys can assist you in preparing custom Articles of Incorporation for your non-profit organization. Non-profit Articles must include certain specific provisions in order to qualify for tax-exempt status once your application is filed with the IRS (explained below). These provisions concern the charitable purpose of the organization and what happens in the event of termination or dissolution of the organization.
Once your non-profit Articles are filed with the Florida Department of State, you will have to file an Annual Report every year thereafter to keep the organization actively registered with the State.
5. Get your Employer Identification Number
An Employer Identification Number (EIN) is like a Social Security Number for your business. It is required in order to open a business bank account, report new employees to the taxing authorities and for other tax purposes.
6. Register with state offices
If you intend to solicit contributions from the Florida public, you must register with the Division of Consumer Services. You should also register your company with the Florida Department of Revenue and complete all applicable tax-exempt organization filings. You may also have to register for a Business Taxes in your county or local municipality (varies by county and/or city). Our attorneys can also assist with your state filings if needed.
7. Apply for tax exemptions
In order to be granted tax-exempt, non-profit 501 (c) (3) status, you must affirmatively apply for such status at the Federal and State level.
The IRS form for seeking 501 (c) (3) tax-exempt status is Form 1023. This application requests extensive information concerning your company, its charitable purpose, proposed beneficiaries, funding, activities, financial projections and revenues, among other things. On the State level, you must complete Florida Form DR5, Application for a Consumer’s Certificate of Exemption, and submit to the Florida Department of Revenue.
There are other issues to consider in setting up a non-profit organization, including by-laws, organizational meetings, record-keeping and annual tax filings. Our attorneys have assisted many organizations with setting up their non-profit company and filing their IRS Application for Tax-Exempt Status. We are happy to talk with you about your specific needs, call us for a free consultation, (305) 913.1333.