Are you looking to start a nonprofit in Ohio? You’ve come to the right place. Known for its vibrant community and rich culture, Ohio (often referred to as The Buckeye 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 Ohio’s motto, “With God, all things are possible,” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in Ohio. 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 Ohio, we encourage you to read this article in its entirety.
On this page, you’ll learn about the following:
- What is a Nonprofit in Ohio?
- Types of Nonprofits in Ohio
- How to Start a Nonprofit Corporation in Ohio
- Step 1: Get a Suitable Name for Your Ohio Nonprofit Corp
- Step 2: Appoint the Initial Board of Directors
- Step 3: Appoint Your Ohio Statutory Agent
- Step 4: Write Ohio Nonprofit Bylaws
- Step 5: File the Ohio Articles of Incorporation
- Step 6: Obtain Tax ID for Your Ohio Nonprofit Corporation
- Step 7: Get Business Licenses in Ohio
- Step 8: Federal Tax Exemption
- Step 9: State Tax Exemption
- Step 10: Get Insurance for Your Ohio Nonprofit
- After Forming Your Ohio Nonprofit Corporation
- FAQs
What is a Nonprofit in Ohio?
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 Ohio, 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 Ohio
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 Ohio 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 Ohio might be eligible for tax exemptions (check with Ohio Department of Taxation), but this type of organization does not get to enjoy limited liability and personal asset protection.
How to Start a Nonprofit Corporation in Ohio
Setting up a nonprofit corporation requires a few things to consider. Name of the nonprofit, initial directors, drafting bylaws, get a Statutory 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 Ohio 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 Ohio 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 some time 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 Ohio Statutory Agent
The third step is to get a Ohio Statutory Agent for your nonprofit corporation. The Statutory 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 Ohio.
Step 4: Write Ohio 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 Ohio state law. It is similar to an LLC operating agreement in Ohio for the LLC owners.
Step 5: File the Ohio Articles of Incorporation
This is the most important step. File your Articles of Incorporation with the Ohio Secretary of State. You can do it through three methods that are online, by mail and drop box. All the formation forms, such as the Ohio LLC Articles of Organization form, the Ohio Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the Ohio 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 $99 for online and by mail filing to the Ohio Secretary of State, P.O. Box 670, Columbus, OH 43216 or upload it online (if available).
Step 6: Obtain Tax ID for Your Ohio 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 Ohio
The next step is to get the business licenses you need to run your nonprofit organization in Ohio. 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 Ohio, you must apply for the tax exemption to Ohio Department of Taxation. 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 Tax Unit Exemption Certificate to apply for the state tax exemption. Read Ohio classification of taxes to learn more about the Ohio tax structure.
Step 10: Get Insurance for Your Ohio 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 Ohio Department of Insurance for more information.
After Forming Your Ohio 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 Ohio. 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 Ohio
Following are some of the Nonprofit Organizations in Ohio. The contact information of these organizations can be found on Ohio SOS official websites.
- Crayons to Classrooms
- Heartbeat International
- Inc.
- Mission4Maureen
- First Glance Student Center
- Inc.
- 4 Paws For Ability Inc.
- Truth For Life with Alistair Begg
- Sanctuary for Senior Dogs
- Cozy Cat Cottage. Powell
- OH.
FAQs
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Why Ohio Nonprofit Corporation is So Important
The Ohio Nonprofit Corporation Act was established to provide structure and guidance for organizations looking to operate in the state while promoting accountability, transparency, and integrity. By setting clear guidelines and regulations, the act ensures that nonprofits are held to a high standard of excellence and are able to fulfill their missions effectively.
Nonprofit corporations in Ohio serve a wide range of purposes, from providing aid to the homeless and hungry to supporting the arts, education, and environmental conservation efforts. These organizations often address critical issues that are not adequately met by government agencies or for-profit businesses, filling important gaps in services and resources that are essential for the well-being of society as a whole.
One of the key reasons why nonprofit corporations are so important in Ohio is their ability to rally the community around a common cause. Whether it be raising awareness for a specific issue, fundraising for a worthy campaign, or mobilizing volunteers to make a tangible difference, nonprofits have the power to unite individuals from all walks of life who share a commitment to making a difference in the world.
Nonprofit corporations also play a vital role in promoting social justice and equity, advocating for marginalized populations, and working towards a more inclusive and compassionate society. These organizations are often at the forefront of fighting inequality, discrimination, and systemic injustice that plague our communities, using their platforms to amplify the voices of those who are too often silenced or overlooked.
Moreover, nonprofit corporations in Ohio serve as a crucial catalyst for economic development and prosperity. By stimulating job growth, fostering entrepreneurship, and investing in local communities, nonprofits contribute to the overall well-being and vitality of the state’s economy. Many nonprofits also collaborate with businesses and government agencies to address pressing social issues, leveraging their resources and expertise to achieve meaningful, sustainable change.
In addition, nonprofit corporations in Ohio play a significant role in preserving our cultural heritage, protecting the environment, and advancing scientific research and innovation. These organizations are often the driving force behind important initiatives that shape the future of our society and ensure a legacy of progress and prosperity for generations to come.
In conclusion, the Ohio Nonprofit Corporation Act serves as a crucial framework for supporting the important work of nonprofits in the state, enabling these organizations to fulfill their missions, serve their communities, and make a lasting impact on society. By recognizing the importance of nonprofit corporations in Ohio and beyond, we can further appreciate the invaluable role they play in shaping a more compassionate, equitable, and vibrant world for all.
Conclusion
Starting a nonprofit corporation in Ohio 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 Ohio, 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 Ohio, you must follow the steps mentioned above in the article.