How to Start a Nonprofit in Arkansas


Steve Goldstein
Steve Goldstein
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Start a Nonprofit in Arkansas

Are you looking to start a nonprofit in Arkansas? You’ve come to the right place. Known for its vibrant community and rich culture, Arkansas (often referred to as The Natural 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 Arkansas’s motto, “The people rule (Regnat populus),” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in Arkansas. 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 Arkansas, we encourage you to read this article in its entirety.

What is a Nonprofit in Arkansas?

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 Arkansas, 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 Arkansas

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-

  1. Nonprofit LLC
  2. Nonprofit Corporation
  3. Unincorporated Nonprofit

Forming an LLC in Arkansas 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 Arkansas might be eligible for tax exemptions (check with Arkansas Department of Finance and Administration), but this type of organization does not get to enjoy limited liability and personal asset protection.

How to Start a Nonprofit Corporation in Arkansas

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 Arkansas 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 Arkansas 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 120 days 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 Arkansas Registered Agent

The third step is to get a Arkansas 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 Arkansas.

Step 4: Write Arkansas 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 Arkansas state law. It is similar to an LLC operating agreement in Arkansas for the LLC owners.

Step 5: File the Arkansas Articles of Incorporation

This is the most important step. File your Articles of Incorporation with the Arkansas Secretary of State. You can do it through two ways, in-person and by mail. All the formation forms, such as the Arkansas LLC Certificate of Organization form, the Arkansas Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the Arkansas 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 $45 for filing in-person and by mail to the Arkansas Secretary of State, 1401 W. Capital Ave., Suite 250, Little Rock, AR 72201 or upload it online (if available).

Step 6: Obtain Tax ID for Your Arkansas 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 Arkansas

The next step is to get the business licenses you need to run your nonprofit organization in Arkansas. 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 Arkansas, you must apply for the tax exemption to Arkansas Department of Finance and Administration. 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 AR1023CT to apply for the state tax exemption. Read Arkansas classification of taxes to learn more about the Arkansas tax structure.

Step 10: Get Insurance for Your Arkansas 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 Arkansas Insurance Department for more information.

After Forming Your Arkansas 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 Arkansas. 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 Arkansas

Following are some of the Nonprofit Organizations in Arkansas. The contact information of these organizations can be found on Arkansas SOS official websites.

  • Safe Places Little Rock. Little Rock AR.
  • Lifewater International. Bentonville AR.
  • All American Dachshund Rescue. Sheridan AR.
  • Rock City Rescue. North Little Rock AR.
  • Turpentine Creek Foundation Inc.
  • Southern States Rescued Rottweilers Inc.
  • Heifer Project International Inc
  • Arkansas Rice Depot Inc.

FAQs

What are the steps for starting a nonprofit in Arkansas?
The first step in starting a nonprofit in Arkansas is to form a legal entity. This is typically done by filing Articles of Incorporation with the Arkansas Secretary of State’s office and obtaining the appropriate organizational documents. The second step is to obtain federal tax-exempt status from the IRS by filing Form 1023 or Form 1023-EZ. The third step is to obtain an Arkansas state tax-exempt status by filing Form AR-501 with the Arkansas Department of Finance and Administration. The fourth step is to register with the Arkansas Charitable Solicitation Act, if applicable. The fifth step is to prepare bylaws, obtain insurance, and open bank accounts. The sixth step is to apply for grants and seek other sources of funding.
What is the cost for starting a nonprofit in Arkansas?
The cost for starting a nonprofit in Arkansas varies depending on the complexity of the organization. The cost for filing the Articles of Incorporation with the Arkansas Secretary of State’s office is typically $50. The cost for filing Form 1023 or Form 1023-EZ with the IRS typically ranges from $400-$850. The cost for filing Form AR-501 with the Arkansas Department of Finance and Administration is typically $25. Other costs might include insurance, bank accounts, and legal fees.
What documents are needed to start a nonprofit in Arkansas?
The documents needed to start a nonprofit in Arkansas include Articles of Incorporation, Form 1023 or Form 1023-EZ, Form AR-501, bylaws, and other organizational documents.
What type of entity is required to start a nonprofit in Arkansas?
In Arkansas, the entity type required to start a nonprofit is a Corporation. The Articles of Incorporation must be filed with the Arkansas Secretary of State’s office.
What are the filing requirements for a nonprofit in Arkansas?
The filing requirements for a nonprofit in Arkansas include filing Articles of Incorporation with the Arkansas Secretary of State’s office, filing Form 1023 or Form 1023-EZ with the IRS, filing Form AR-501 with the Arkansas Department of Finance and Administration, and registering with the Arkansas Charitable Solicitation Act, if applicable.
Is it necessary to register with the Arkansas Charitable Solicitation Act?
Yes, it is necessary to register with the Arkansas Charitable Solicitation Act if a nonprofit is soliciting donations or engaging in fundraising activities within the state.
What is the process of starting a nonprofit in Arkansas?
The process of starting a nonprofit in Arkansas involves researching the state requirements and filing the necessary paperwork with the Arkansas Secretary of State. Additionally, you must be aware of the IRS rules and regulations, including obtaining a federal tax identification number and filing the appropriate federal documents.
What documents do I need to file when starting a nonprofit in Arkansas?
When starting a nonprofit in Arkansas, you will need to file Articles of Incorporation with the Arkansas Secretary of State. Additionally, you will need to file the IRS Form 1023-EZ or 1023 to obtain federal tax-exempt status.
How long does it take to start a nonprofit in Arkansas?
The length of time it takes to start a nonprofit in Arkansas can vary depending on the complexity of the organization and the paperwork involved. Generally, it can take anywhere from 2 weeks to several months.
What are the fees involved in starting a nonprofit in Arkansas?
Fees associated with starting a nonprofit in Arkansas can vary depending on the type of organization and the paperwork to be filed. Generally, the filing fee for Articles of Incorporation with the Arkansas Secretary of State is $25. Additionally, you may need to pay fees for obtaining a federal tax identification number and filing the IRS Form 1023-EZ or 1023.
Are there any special requirements for starting a nonprofit in Arkansas?
Yes, there are special requirements for starting a nonprofit in Arkansas. The Arkansas Secretary of State requires that nonprofits have a minimum of three board members and that the Articles of Incorporation include specific language. Additionally, the Internal Revenue Service has its own set of rules and regulations for obtaining tax-exempt status.
What types of nonprofits can be established in Arkansas?
The types of nonprofits that can be established in Arkansas include public charities, private foundations, and unincorporated associations.
Do I need a lawyer to start a nonprofit in Arkansas?
While it is not required to have a lawyer when starting a nonprofit in Arkansas, it is highly recommended to ensure that all the necessary paperwork is properly filed and that the organization is properly structured to meet its objectives.
Does Arkansas require nonprofits to have a board of directors?
Yes, Arkansas requires nonprofits to have a board of directors with a minimum of three members.
How is a nonprofit in Arkansas governed?
A nonprofit in Arkansas is generally governed by the board of directors, which is responsible for overseeing the operations of the organization and making decisions related to the organization’s mission and objectives.
What is the annual filing requirement for nonprofits in Arkansas?
Nonprofits in Arkansas are required to file an Annual Report with the Arkansas Secretary of State every year.
Who is responsible for filing taxes for a nonprofit in Arkansas?
The board of directors is responsible for filing taxes for a nonprofit in Arkansas. Depending on the type of organization and its activities, the nonprofit may be required to file federal, state, and local taxes.
What is a 501(c)(3) designation and how do I obtain it for my nonprofit in Arkansas?
A 501(c)(3) designation is a federal tax-exempt status granted by the Internal Revenue Service (IRS). To obtain this designation for your nonprofit in Arkansas, you must file Form 1023-EZ or 1023 with the IRS.
How do I apply for grants to fund my nonprofit in Arkansas?
To apply for grants to fund your nonprofit in Arkansas, you must first research potential grant opportunities and then submit an application to the grantor. Additionally, many grantors require that you have a 501(c)(3) designation from the IRS.
How do I promote my nonprofit in Arkansas?
Promoting your nonprofit in Arkansas can be done with a variety of strategies, such as advertising, public speaking, and social media. Additionally, you can reach out to local media outlets and other organizations to raise awareness about your mission.
What are the steps I need to take to start a nonprofit in Arkansas?
The steps to start a nonprofit in Arkansas include researching the organization’s mission, drafting articles of incorporation and organizing documents, applying for a federal employer identification number (EIN), registering with the Arkansas Secretary of State, applying for tax-exempt status with the IRS, and applying for state sales and use tax exemption.
Is a nonprofit in Arkansas different than a nonprofit in other states?
A nonprofit in Arkansas is subject to the same laws and regulations as a nonprofit in other states, but there may be some differences in state-level requirements. It’s important to research the specific requirements for Arkansas to ensure that your nonprofit is in compliance with all applicable laws.
Are there any resources available to help me get started with a nonprofit in Arkansas?
Yes! There are many resources available to help you start a nonprofit in Arkansas. Arkansas Nonprofit Alliance is a great resource for information on the specific steps to start a nonprofit in the state, and the Secretary of State’s website provides helpful guidance on the filing process.
How do I get a federal employer identification number (EIN) for my nonprofit in Arkansas?
To obtain a federal employer identification number for your nonprofit in Arkansas, you can apply for an EIN online at the IRS website or by calling the IRS toll-free at 800-829-4933.
Does my nonprofit in Arkansas need to register with the IRS?
Yes. All nonprofits in Arkansas must register with the IRS in order to gain tax-exempt status. To do so, you must file Form 1023, Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code.
Are there any special requirements for nonprofits in Arkansas?
Yes. Nonprofits in Arkansas are subject to the Arkansas Nonprofit Corporation Act, and organizations may be required to register with the Arkansas Department of Finance and Administration for certain activities, such as soliciting donations.
How do I apply for tax-exempt status for my nonprofit in Arkansas?
To apply for tax-exempt status in Arkansas, you must complete and submit Form 1023, Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code, and include the appropriate filing fee.
Does my nonprofit in Arkansas need to register with the state?
Yes. All nonprofits in Arkansas must file articles of incorporation with the Secretary of State in order to be recognized as a legal entity.
Are there any filing fees associated with forming a nonprofit in Arkansas?
Yes. The filing fee to form a nonprofit in Arkansas is $50, and must be submitted with the articles of incorporation.
Are there any restrictions on the activities of a nonprofit in Arkansas?
Yes. Under the Arkansas Nonprofit Corporation Act, nonprofits are prohibited from engaging in certain activities, such as political activities and other activities that are in conflict with the organization’s mission or purpose.
How do I apply for state sales and use tax exemption for my nonprofit in Arkansas?
To apply for state sales and use tax exemption for your nonprofit in Arkansas, you must complete and submit Form AR1000NT, Application for Nonprofit Sales and Use Tax Exemption.
What is the Arkansas Nonprofit Corporation Act?
The Arkansas Nonprofit Corporation Act is the state law that governs the formation and management of nonprofits in Arkansas. The Act establishes the rules and regulations for nonprofits, including filing requirements, restrictions on activities, and other rules that must be followed.
What is the difference between a nonprofit and a for-profit corporation in Arkansas?
The main difference between a nonprofit and a for-profit corporation in Arkansas is that a nonprofit is organized for charitable, religious, educational, or other public benefit purposes and is exempt from federal income taxes; a for-profit corporation is organized to generate a profit and is subject to federal income taxes.

Also Read

Why Arkansas Nonprofit Corporation is So Important

Arkansas Nonprofit Corporation is an umbrella organization that supports and empowers these nonprofits across the state. By providing resources, training, and advocacy, Arkansas Nonprofit Corporation plays a critical role in ensuring that nonprofits have the tools and support they need to effectively serve their communities.

One of the main reasons why Arkansas Nonprofit Corporation is so important is that it helps nonprofits navigate the complex legal and regulatory landscape. Incorporating as a nonprofit can be a daunting process, with many legal requirements and forms to adhere to. Arkansas Nonprofit Corporation provides guidance and support to organizations looking to incorporate, ensuring that they are set up for success from the start.

Additionally, Arkansas Nonprofit Corporation offers valuable resources and training opportunities to help nonprofits thrive. From fundraising and grant writing to board governance and strategic planning, the organization provides the tools and knowledge that nonprofits need to operate efficiently and effectively. By equipping nonprofits with these skills, Arkansas Nonprofit Corporation helps to increase the impact and sustainability of these organizations.

Furthermore, Arkansas Nonprofit Corporation serves as a powerful advocate for nonprofits in the state. By raising awareness of the important work that nonprofits do and advocating for policies that support their mission, the organization helps to ensure that nonprofits have a seat at the table when decisions are being made that impact their communities. This advocacy work is crucial in ensuring that nonprofits have a voice and are able to continue serving those in need.

Nonprofits play a unique and vital role in communities, addressing social issues, providing essential services, and working towards positive change. However, they cannot do this work alone. Arkansas Nonprofit Corporation provides the essential support and resources that nonprofits need to make a difference in the lives of Arkansans.

In conclusion, Arkansas Nonprofit Corporation is an invaluable resource for nonprofits in the state. By offering guidance, resources, and advocacy, the organization helps nonprofits to navigate the complex legal landscape, build capacity, and amplify their impact. With their support, nonprofits are able to continue their important work in serving the people of Arkansas and making our communities stronger and more vibrant.

Conclusion

Starting a nonprofit corporation in Arkansas 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 Arkansas, 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 Arkansas, you must follow the steps mentioned above in the article.

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