Are you looking to start a nonprofit in Minnesota? You’ve come to the right place. Known for its vibrant community and rich culture, Minnesota (often referred to as The North Star State) is an ideal location for establishing a nonprofit organization. Unlike for-profit businesses, nonprofits focus on addressing pressing social issues and require a strong foundation, thorough research, and a clear mission targeting a specific community problem.
Embarking on the journey of creating a nonprofit entails various crucial steps, such as obtaining 501(c)(3) status. A 501(c)(3) organization is designed for charitable, religious, educational purposes, and more, qualifying it for federal and state tax exemptions.
In the spirit of Minnesota’s motto, “The Star of the North (L’Étoile du Nord),” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in Minnesota. Keep in mind that the steps discussed here are general guidelines, and modifications may be necessary depending on your specific circumstances. To gain a deep understanding of how to start a nonprofit in Minnesota, we encourage you to read this article in its entirety.
On this page, you’ll learn about the following:
- What is a Nonprofit in Minnesota?
- Types of Nonprofits in Minnesota
- How to Start a Nonprofit Corporation in Minnesota
- Step 1: Get a Suitable Name for Your Minnesota Nonprofit Corp
- Step 2: Appoint the Initial Board of Directors
- Step 3: Appoint Your Minnesota Registered Agent
- Step 4: Write Minnesota Nonprofit Bylaws
- Step 5: File the Minnesota Articles of Incorporation
- Step 6: Obtain Tax ID for Your Minnesota Nonprofit Corporation
- Step 7: Get Business Licenses in Minnesota
- Step 8: Federal Tax Exemption
- Step 9: State Tax Exemption
- Step 10: Get Insurance for Your Minnesota Nonprofit
- After Forming Your Minnesota Nonprofit Corporation
- FAQs
What is a Nonprofit in Minnesota?
Nonprofit organizations are legal entities that operate to serve public benefits and address community issues. Unlike for-profit organizations, nonprofits do not aim to generate any profit. The Internal Revenue Service (IRS) generally exempts nonprofit organizations from tax. However, based on the business entity structure, you will receive tax exemptions as a nonprofit.
In Minnesota, ensure you have a community issue to address before you start forming your nonprofit. It can generally be education, religion, charity, social service, or other social issues. Nonprofits do not pay taxes on the money they receive through fundraising programs, donations, or any charitable funding.
Types of Nonprofits in Minnesota
The first thing one has to decide is what type of nonprofit structure one wants. There are several types of nonprofits one can start. Here is a list of nonprofit types one can choose from-
- Nonprofit LLC
- Nonprofit Corporation
- Unincorporated Nonprofit
Forming an LLC in Minnesota for your nonprofit can be a smooth option. However, having a corporation is less complex than having a nonprofit LLC. Hence, it is wise to start a nonprofit corporation instead of an unincorporated nonprofit or nonprofit LLC.
– LLCBuddy Editorial Team.
Technically, starting a corporation for your nonprofit protects your personal assets but also is eligible for Federal and State tax exemptions. When you form an LLC for your nonprofit, it only protects your personal assets but does not give you any tax exemptions. On the other hand, a nonprofit Corporation has both corporation and limited liability company benefits. You can also have an unincorporated structure where you don’t have to register it. Unincorporated nonprofits in Minnesota might be eligible for tax exemptions (check with Minnesota Department of Revenue), but this type of organization does not get to enjoy limited liability and personal asset protection.
How to Start a Nonprofit Corporation in Minnesota
Setting up a nonprofit corporation requires a few things to consider. Name of the nonprofit, initial directors, drafting bylaws, get a Registered Agent, obtain tax IDs, insurance, and a bank account – these are important steps you must follow. The steps mentioned here are general business formation steps. State-wise, some steps can be different. Getting an expert consultation before you start your nonprofit corporation formation is recommended. Here are the steps explained below-
Step 1: Get a Suitable Name for Your Minnesota Nonprofit Corp
The first step is to name your nonprofit corporation. You must be sure that the name is available and that no other organization is using this name. You can check the Minnesota LLC name search to find the best suitable name for your organization. You must follow those rules to avoid any legal issues later. You can reserve the name for 1 year for any domestic entity (such as a nonprofit LLC) if you’re not forming the nonprofit immediately.
Step 2: Appoint the Initial Board of Directors
The next step is to get your nonprofit’s initial board of directors. It is very important when you are setting up a nonprofit corporation. You need at least Three unrelated directors to start the organization. If you don’t choose a minimum of Three directors, it will automatically become a member-managed corporation.
Step 3: Appoint Your Minnesota Registered Agent
The third step is to get a Minnesota Registered Agent for your nonprofit corporation. The Registered Agent is a person who receives all the legal documents on your behalf. It is necessary to get a registered agent. He/she must be above 18 years old and have a physical address in Minnesota.
Step 4: Write Minnesota Nonprofit Bylaws
The next important step is to write the company bylaws. The directors and board members must decide how the meetings, elections, voting, and other corporate activities will be held. These bylaws must comply with the Minnesota state law. It is similar to an LLC operating agreement in Minnesota for the LLC owners.
Step 5: File the Minnesota Articles of Incorporation
This is the most important step. File your Articles of Incorporation with the Minnesota Secretary of State. You can do it through three ways, online, by mail and in-person. All the formation forms, such as the Minnesota LLC Articles of Organization form, the Minnesota Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the Minnesota SOS official website. Submit the details of your nonprofit corporation, like the name of the nonprofit, address, name and address of the registered agent, operation dates, directors’ details, and more information related to your company. You can send the form (for offline filing) and the filing fee of $155 for filing online and in-person, and $135 for filing by mail to the Minnesota Secretary of State — Business Services, Retirement Systems of Minnesota Building, 60 Empire Drive, Suite 100, St Paul, MN 55103 or upload it online (if available).
Step 6: Obtain Tax ID for Your Minnesota Nonprofit Corporation
The subsequent step involves obtaining a Tax ID for your nonprofit corporation. You will need to acquire an Employer Identification Number (EIN) from the official IRS website. To obtain the EIN, submit your application to the IRS office either by mail or through their online platform. There is no associated cost for this process.
Step 7: Get Business Licenses in Minnesota
The next step is to get the business licenses you need to run your nonprofit organization in Minnesota. Check with the local government office if any special licenses you need to run your nonprofit. You can file your nonprofit as a charity if you want.
Step 8: Federal Tax Exemption
You must submit Form 1023 to the IRS to file for federal tax exemption. This form, titled “Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,” is required for all nonprofit corporations. Smaller nonprofits have the option to file Form 1023-EZ instead. You will be prompted to provide details about your organization upon obtaining the relevant form. Complete the form with the necessary information and submit it. The filing fees are $600 for Form 1023 and $275 for Form 1023-EZ.
Step 9: State Tax Exemption
Once you get the Federal Tax Exempt, it is time for State Tax Exempt. In Minnesota, you must apply for the tax exemption to Minnesota Department of Revenue. Get the form, fill it up with the correct details, and send it to the office. You may need to pay a fee along with the form and supportive documents to apply for the State Tax Exemption. You need Form ST3-Certificate of Exemption to apply for the state tax exemption. Read Minnesota classification of taxes to learn more about the Minnesota tax structure.
Step 10: Get Insurance for Your Minnesota Nonprofit
Once you start your nonprofit, you must get insurance to protect your organization. You must get workers’ compensation and unemployment insurance if you have employees. Based on your nonprofit structure, you might need general liability insurance, property, vehicle, auto insurance, etc. You can contact the insurance providers to learn more about which are required for your organization. Also, you can contact Minnesota Department of Commerce, Insurance Division for more information.
After Forming Your Minnesota Nonprofit Corporation
Once your nonprofit is formed, there are additional steps to complete:
- Get a Business Bank Account: You must get a business account for all types of business-related transactions in Minnesota. You may need different documents based on the bank and place of business. Check with the bank for it.
- File Nonprofit as Charity: This is optional. Your nonprofit is either for charity purposes or any purpose that meets your community’s needs. If your organization is for charity purposes, then you can file your nonprofit as a charity to enjoy tax exemptions.
- Other Business Compliances: You may need additional compliances based on your nonprofit type. Check with your attorney or local authority for more information.
Names of Nonprofit Corporations in Minnesota
Following are some of the Nonprofit Organizations in Minnesota. The contact information of these organizations can be found on Minnesota SOS official websites.
- Veterans Airlift Command
- Can Do Canines
- Mission Haiti Inc.
- Washburn Center for Children
- Interfaith Outreach & Community Partners
- CAIR-Minnesota
- Loft
- Midwest Animal Rescue & Services
FAQs
Also Read
- Start a Nonprofit in Alabama
- Start a Nonprofit in Alaska
- Start a Nonprofit in Arizona
- Start a Nonprofit in Arkansas
- Start a Nonprofit in California
- Start a Nonprofit in Colorado
- Start a Nonprofit in Connecticut
- Start a Nonprofit in DC
- Start a Nonprofit in Delaware
- Start a Nonprofit in Florida
- Start a Nonprofit in Georgia
- Start a Nonprofit in Hawaii
- Start a Nonprofit in Idaho
- Start a Nonprofit in Illinois
- Start a Nonprofit in Indiana
- Start a Nonprofit in Iowa
- Start a Nonprofit in Kansas
- Start a Nonprofit in Kentucky
- Start a Nonprofit in Louisiana
- Start a Nonprofit in Maine
- Start a Nonprofit in Maryland
- Start a Nonprofit in Massachusetts
- Start a Nonprofit in Michigan
- Start a Nonprofit in Minnesota
- Start a Nonprofit in Mississippi
- Start a Nonprofit in Missouri
- Start a Nonprofit in Montana
- Start a Nonprofit in Nebraska
- Start a Nonprofit in Nevada
- Start a Nonprofit in New Hampshire
- Start a Nonprofit in New Jersey
- Start a Nonprofit in New Mexico
- Start a Nonprofit in New York
- Start a Nonprofit in North Carolina
- Start a Nonprofit in North Dakota
- Start a Nonprofit in Ohio
- Start a Nonprofit in Oklahoma
- Start a Nonprofit in Oregon
- Start a Nonprofit in Pennsylvania
- Start a Nonprofit in Rhode Island
- Start a Nonprofit in South Carolina
- Start a Nonprofit in South Dakota
- Start a Nonprofit in Tennessee
- Start a Nonprofit in Texas
- Start a Nonprofit in Utah
- Start a Nonprofit in Vermont
- Start a Nonprofit in Virginia
- Start a Nonprofit in Washington
- Start a Nonprofit in West Virginia
- Start a Nonprofit in Wisconsin
- Start a Nonprofit in Wyoming
Why Minnesota Nonprofit Corporation is So Important
First and foremost, Minnesota nonprofit corporations work tirelessly to address issues that impact the community as a whole. From providing shelter to the homeless to offering mental health services, these organizations serve as lifelines for individuals facing difficult circumstances. Without the presence of nonprofit organizations, many Minnesotans would struggle to access the resources and assistance they need to thrive.
Furthermore, nonprofit corporations in Minnesota contribute significantly to the state’s economy and overall well-being. These organizations create jobs, stimulate economic growth, and attract funding and resources to the state. By promoting innovation and collaboration, nonprofits help cultivate a strong and vibrant community that benefits everyone.
In addition to their economic impact, nonprofit corporations in Minnesota also play a vital role in fostering a sense of community and social cohesion. These organizations bring individuals together from all walks of life to work towards common goals and support one another. Through volunteerism, advocacy, and outreach efforts, nonprofit corporations help build connections and relationships that strengthen the fabric of society.
Moreover, nonprofit organizations in Minnesota are essential in advocating for important causes and social issues. By raising awareness, organizing campaigns, and pushing for legislative change, these organizations serve as powerful advocates for those who may not otherwise have a voice. Whether fighting for environmental conservation, social justice, or healthcare access, nonprofit corporations in Minnesota play a critical role in driving positive change.
Finally, Minnesota nonprofit corporations are key players in addressing gaps in services and filling unmet needs within the state. These organizations often step in where government agencies and other entities fall short, providing essential services and support to marginalized and underserved populations. Through their dedication and commitment, nonprofit corporations in Minnesota help ensure that no one is left behind.
In conclusion, Minnesota nonprofit corporations are vital to the well-being of the state and its residents. From providing essential services to advocating for important causes, these organizations play a crucial role in making Minnesota a better place for everyone. As such, it is imperative that we continue to support and recognize the valuable work of nonprofit corporations in Minnesota.
Conclusion
Starting a nonprofit corporation in Minnesota is an incredible way to give back to your community and positively impact the causes that matter most to you. By forming a nonprofit, you can provide essential services, promote awareness, and make a lasting difference in the lives of those who need it most. In Minnesota, a lot of nonprofit organizations are there to cater to people in need. Starting a nonprofit corporation is better than an LLC, as it provides limited liability and tax benefits. It helps you save taxes. If you want to start a nonprofit in Minnesota, you must follow the steps mentioned above in the article.