How to Start a Nonprofit in North Carolina


Steve Goldstein
Steve Goldstein
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Start a Nonprofit in North Carolina

Are you looking to start a nonprofit in North Carolina? You’ve come to the right place. Known for its vibrant community and rich culture, North Carolina (often referred to as The Tar Heel 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 North Carolina’s motto, “To be, rather than to seem (Esse quam videri),” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in North Carolina. 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 North Carolina, we encourage you to read this article in its entirety.

What is a Nonprofit in North Carolina?

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 North Carolina, 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 North Carolina

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 North Carolina 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 North Carolina might be eligible for tax exemptions (check with North Carolina 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 North Carolina

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 North Carolina 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 North Carolina 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 One unrelated directors to start the organization. If you don’t choose a minimum of One directors, it will automatically become a member-managed corporation.

Step 3: Appoint Your North Carolina Registered Agent

The third step is to get a North Carolina 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 North Carolina.

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

Step 5: File the North Carolina Articles of Incorporation

This is the most important step. File your Articles of Incorporation with the North Carolina Secretary of State. You can do it through three methods that are online, by mail and in-person. All the formation forms, such as the North Carolina LLC Articles of Organization form, the North Carolina Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the North Carolina 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 $125 for filing online, or by mail. to the The Secretary of State, Business Registration Division, P.O. Box 29622, Raleigh, NC 27626 or upload it online (if available).

Step 6: Obtain Tax ID for Your North Carolina 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 North Carolina

The next step is to get the business licenses you need to run your nonprofit organization in North Carolina. 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 North Carolina, you must apply for the tax exemption to North Carolina 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 E595E Form to apply for the state tax exemption. Read North Carolina classification of taxes to learn more about the North Carolina tax structure.

Step 10: Get Insurance for Your North Carolina 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 North Carolina Department of Insurance for more information.

After Forming Your North Carolina 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 North Carolina. 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 North Carolina

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

  • Zucker Family Foundation
  • Zoweh Inc
  • Zotung Chin Baptist Association
  • Zoptiks Foundation Inc.
  • Zootastic Conservation
  • Zoopendous Show Chorus Inc
  • Zoological Rescue And Education Coalition
  • Zookeeper Ministries Inc.

FAQs

What is a Nonprofit Corporation in North Carolina?
A Nonprofit Corporation in North Carolina is a business entity that operates for charitable, educational, religious, literary, or other public purposes, rather than to make a profit.
Is it required to register a Nonprofit Corporation in North Carolina with the state?
Yes, all Nonprofit Corporations in North Carolina must register with the North Carolina Secretary of State.
What forms are required to register a Nonprofit Corporation in North Carolina?
To register a Nonprofit Corporation in North Carolina, you must submit the forms Articles of Incorporation, Organization of a Nonprofit Corporation, and a Business Entity Report.
What fees are associated with registering a Nonprofit Corporation in North Carolina?
The filing fee for registering a Nonprofit Corporation in North Carolina is currently $60.
What are the steps to register a Nonprofit Corporation in North Carolina?
The steps to register a Nonprofit Corporation in North Carolina include
How do I obtain a Federal Tax ID Number (EIN) for my Nonprofit Corporation in North Carolina?
To obtain a Federal Tax ID Number (EIN) for your Nonprofit Corporation in North Carolina, you can apply online through the Internal Revenue Service.
How do I apply for tax-exempt status in North Carolina for my Nonprofit Corporation?
To apply for tax-exempt status in North Carolina for your Nonprofit Corporation, you must submit Form CD-405, Application for Exemption from North Carolina Income Tax.
What is the filing fee for Form CD-405?
The filing fee for Form CD-405 is currently $25.
How long is the process for obtaining tax-exempt status in North Carolina for my Nonprofit Corporation?
The process for obtaining tax-exempt status in North Carolina for your Nonprofit Corporation can take up to 90 days.
What are the steps to apply for tax-exempt status in North Carolina for my Nonprofit Corporation?
The steps to apply for tax-exempt status in North Carolina for your Nonprofit Corporation include
Do I need to obtain a Certificate of Existence in North Carolina for my Nonprofit Corporation?
Yes, all Nonprofit Corporations in North Carolina must obtain a Certificate of Existence from the North Carolina Secretary of State.
How do I obtain a Certificate of Existence in North Carolina for my Nonprofit Corporation?
To obtain a Certificate of Existence in North Carolina for your Nonprofit Corporation, you must submit Form ED-001, Application for Certificate of Existence.
How much does a Certificate of Existence cost?
The filing fee for a Certificate of Existence in North Carolina is currently $25.
Are there any other requirements to maintain my Nonprofit Corporation in North Carolina?
Yes, Nonprofit Corporations in North Carolina must also file an annual report with the North Carolina Secretary of State.
What is an annual report and how do I file it?
An annual report is an official document that outlines your Nonprofit Corporation’s activities, financial information, and any changes to the corporation’s board of directors or officers. To file an annual report in North Carolina, you must submit Form CD-400S, Annual Report for North Carolina Nonprofit Corporations.
How much does it cost to file an annual report in North Carolina?
The filing fee for an annual report in North Carolina is currently $25.
How do I register with the North Carolina Department of Revenue?
To register with the North Carolina Department of Revenue, you must complete Form NC-BR, Business Registration Application.
What fees are associated with registering with the North Carolina Department of Revenue?
The filing fee for registering with the North Carolina Department of Revenue is currently $25.
Does my Nonprofit Corporation in North Carolina need to pay sales tax?
Yes, Nonprofit Corporations in North Carolina must collect and remit sales tax on taxable items that they sell or lease.
Is my Nonprofit Corporation required to register with the North Carolina Secretary of State Charitable Solicitations Office?
Yes, all Nonprofit Corporations in North Carolina that solicit contributions from the public must register with the North Carolina Secretary of State Charitable Solicitations Office.
How do I register with the North Carolina Secretary of State Charitable Solicitations Office?
To register with the North Carolina Secretary of State Charitable Solicitations Office, you must submit the form NC Charitable Solicitations Registration, along with a copy of the Nonprofit Corporation’s Articles of Incorporation and other required documents.
What fees are associated with registering with the North Carolina Secretary of State Charitable Solicitations Office?
The filing fee for registering with the North Carolina Secretary of State Charitable Solicitations Office is currently $25.
How do I obtain a North Carolina nonprofit license?
To obtain a North Carolina nonprofit license, you must submit an application to the North Carolina Department of Revenue.
What fees are associated with obtaining a North Carolina nonprofit license?
The filing fee for obtaining a North Carolina nonprofit license is currently $50.
Do I need to obtain a North Carolina Employer Identification Number (EIN) for my Nonprofit Corporation?
Yes, all Nonprofit Corporations in North Carolina must obtain a North Carolina Employer Identification Number (EIN) in order to open a business bank account and hire employees.
How do I obtain a North Carolina Employer Identification Number (EIN)?
To obtain a North Carolina Employer Identification Number (EIN), you must submit a request to the Internal Revenue Service.
What are the steps for starting a nonprofit in North Carolina?
The steps for starting a nonprofit in North Carolina include
What is the filing fee for registering a nonprofit in North Carolina?
The filing fee for registering a nonprofit in North Carolina is $125.
What documents are required to register a nonprofit in North Carolina?
The documents required to register a nonprofit in North Carolina are the articles of incorporation and a filing fee of $125.
Is it necessary to obtain a federal tax-exempt status in order to register a nonprofit in North Carolina?
Yes, it is necessary to obtain a federal tax-exempt status in order to register a nonprofit in North Carolina.
Is it necessary to obtain a North Carolina Charitable Solicitation License in order to register a nonprofit in North Carolina?
Yes, it is necessary to obtain a North Carolina Charitable Solicitation License in order to register a nonprofit in North Carolina.
What are the requirements for obtaining a North Carolina Charitable Solicitation License?
The requirements for obtaining a North Carolina Charitable Solicitation License include submitting an application and fee, filing a financial report, and submitting an audited financial statement.
Is it necessary to obtain local permits or licenses in order to register a nonprofit in North Carolina?
Yes, it is necessary to obtain local permits or licenses in order to register a nonprofit in North Carolina.
Are there any tax implications for registering a nonprofit in North Carolina?
Yes, registering a nonprofit in North Carolina may have tax implications. All activities that generate income must be reported on the North Carolina Department of Revenue’s Charitable Organization Annual Report.
Is there any other advice for starting a nonprofit in North Carolina?
Yes, there is other advice for starting a nonprofit in North Carolina. It is important to consult with a local attorney or accountant to ensure that the organization is in compliance with all relevant state and federal laws. Additionally, it is important to create a board of directors that meet regularly to oversee the organization’s activities.

Also Read

Why North Carolina Nonprofit Corporation is So Important

One of the primary reasons why nonprofit corporations are so important in North Carolina is their ability to address critical social issues that may fall through the cracks of for-profit businesses or government agencies. Nonprofits have the flexibility to initiate programs and initiatives quickly, responding to the evolving needs of their communities in a way that may not be possible for larger organizations. From providing food and shelter to those experiencing homelessness to offering educational programs for underserved populations, nonprofit corporations fill a vital gap in North Carolina’s social safety net.

Furthermore, nonprofit corporations in North Carolina are often pioneers in exploring innovative solutions to complex problems. These organizations are driven by a mission to improve society rather than generate profits, allowing them to take risks and experiment with new ideas that may not have immediate financial returns. This spirit of innovation is essential for tackling issues such as poverty, education inequality, and environmental sustainability. Nonprofit corporations’ work often serves as a catalyst for larger scale changes in policy and practice, leading to better outcomes for all residents of North Carolina.

Nonprofit corporations also play a key role in preserving and promoting the cultural heritage of North Carolina. These organizations are often dedicated to preserving historical landmarks, supporting local artists and artisans, and celebrating the unique traditions that make North Carolina a special place to live. By investing in the arts, history, and culture, nonprofit corporations contribute to the overall vibrancy and richness of communities across the state.

In addition to their direct impact on society, nonprofit corporations are vital engines of economic growth in North Carolina. These organizations provide jobs and volunteer opportunities for thousands of individuals, contributing to the state’s employment rate and overall economic well-being. Nonprofit corporations also stimulate philanthropic giving, encouraging individuals and businesses to support causes that are important to them. By mobilizing resources from a variety of sources, nonprofits amplify the impact of their work and create ripple effects that benefit the state as a whole.

Ultimately, nonprofit corporations are so important in North Carolina because they embody the spirit of compassion, collaboration, and community that is at the heart of the state’s identity. These organizations bring people together across divisions of race, class, and geography to work toward shared goals and improve the lives of all residents. By supporting nonprofit corporations in North Carolina, individuals can play a direct role in building a more just, equitable, and sustainable society for generations to come.

Conclusion

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

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