How to Start a Nonprofit in Tennessee


Steve Goldstein
Steve Goldstein
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Start a Nonprofit in Tennessee

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

What is a Nonprofit in Tennessee?

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 Tennessee, 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 Tennessee

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 Tennessee 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 Tennessee might be eligible for tax exemptions (check with Tennessee 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 Tennessee

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 Tennessee 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 Tennessee 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 4 months 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 Tennessee Registered Agent

The third step is to get a Tennessee 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 Tennessee.

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

Step 5: File the Tennessee Charter for Profit Corporation

This is the most important step. File your Charter for Profit Corporation with the Tennessee Secretary of State. You can do it through four methods that are e-filing, by email, by mail and in-person. All the formation forms, such as the Tennessee LLC Articles of Organization form, the Tennessee Charter for Profit Corporation form for corporations, forms for LLPs, and all others can be found on the Tennessee 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 $100 for online and by mail filing to the Corporate Filings, 312 Rosa L. Parks Avenue, 6th Floor, William R. Snodgrass Tower, Nashville, Tennessee 37243 or upload it online (if available).

Step 6: Obtain Tax ID for Your Tennessee 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 Tennessee

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

Step 10: Get Insurance for Your Tennessee 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 Tennessee Department of Commerce and Insurance, Insurance Division for more information.

After Forming Your Tennessee 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 Tennessee. 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 Tennessee

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

  • Mercy Multiplied
  • Layman Lessons Church
  • Operation Stand Down Tennessee
  • Book’em
  • Monroe Harding
  • W.O. Smith Community Music School
  • Begin Anew of Middle Tennessee
  • Tennessee Women’s Theater Project.

FAQs

What are the steps to starting a nonprofit in Tennessee?
The first step to starting a nonprofit in Tennessee is to establish an organizational structure and choose a name. This should be done in accordance with the state’s nonprofit formation laws. Next, you will need to register the organization with the Secretary of State and obtain the necessary tax-exempt status from the IRS. Finally, you will need to establish your nonprofit’s governing documents, such as bylaws, policies, and procedures.
What is the process for filing for IRS tax-exempt status in Tennessee?
To be eligible for IRS tax-exempt status in Tennessee, your nonprofit must first be registered with the Secretary of State as a nonprofit corporation. Once this is done, you can apply for tax-exempt status using IRS Form 1023. This form must be filed with the IRS, along with additional information and documents about your organization.
Are there any specific requirements for nonprofits in Tennessee?
Yes, there are specific requirements that nonprofits in Tennessee must meet. These include filing articles of incorporation with the Secretary of State, obtaining a federal employer identification number (EIN), and registering with the state’s Department of Revenue. Nonprofits must also comply with the Tennessee Nonprofit Corporation Act, which outlines various rules and regulations.
How do I register my nonprofit with the Tennessee Secretary of State?
To register your nonprofit with the Tennessee Secretary of State, you must file a Certificate of Formation with the Business Services Division. This form must include information about the organization’s name, purpose, address, and members. Additionally, the filing fee for this form must be paid.
Is there an annual filing requirement for nonprofits in Tennessee?
Yes, nonprofits in Tennessee must file an annual report with the Secretary of State. The filing fee for the annual report is $20. The annual report must include the organization’s name, address, and other information about its activities.
How do I apply for grants in Tennessee?
To apply for grants in Tennessee, you must first research available grants and decide which ones are right for your organization. Once you have selected the appropriate grants, you will need to complete the necessary paperwork and submit the application. It is important to remember that each grant has different requirements and deadlines, so be sure to read the guidelines carefully.
What is a nonprofit organization?
A nonprofit organization is a type of organization that exists for a charitable, educational, religious, literary, or other public purpose, and is exempt from federal income tax under IRS Code section 501(c)(3).
Is it difficult to start a nonprofit in Tennessee?
Starting a nonprofit in Tennessee is not overly difficult, as long as you have a clear vision and plan for the organization, as well as the resources and commitment to move forward.
What documents do I need to file in order to start a nonprofit in Tennessee?
In order to start a nonprofit in Tennessee, you will need to file Articles of Incorporation with the Tennessee Secretary of State, and then file Form 1023 with the Internal Revenue Service (IRS) to obtain tax-exempt status.
How much does it cost to start a nonprofit in Tennessee?
The cost to start a nonprofit in Tennessee will vary depending on the type of organization, the cost of filing documents, and other costs associated with starting the nonprofit. Generally, filing fees for the Articles of Incorporation and Form 1023 with the IRS range from $100 to $800.
What are the legal requirements for forming a nonprofit in Tennessee?
The legal requirements for forming a nonprofit in Tennessee include filing Articles of Incorporation with the Tennessee Secretary of State, filing IRS Form 1023 to obtain tax-exempt status, registering with the Tennessee Department of Revenue, and obtaining any applicable state or local permits and licenses.
What are the rules for running a nonprofit in Tennessee?
The rules for running a nonprofit in Tennessee include following the organization’s mission statement, filing annual reports with the Tennessee Secretary of State, filing IRS Form 990 to maintain the organization’s tax-exempt status, and complying with any applicable state and local regulations.
What is a 501(c)(3) nonprofit organization?
A 501(c)(3) nonprofit organization is an organization that has been granted tax-exempt status from the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code. 501(c)(3) organizations in Tennessee are eligible for grants, donations, and other forms of charitable contributions.
Are there any legal requirements for running a nonprofit in Tennessee?
Yes, there are legal requirements for running a nonprofit in Tennessee. These include filing annual reports with the Tennessee Secretary of State, filing IRS Form 990 to maintain the organization’s tax-exempt status, and complying with any applicable state and local regulations.
What kind of taxes do nonprofits in Tennessee have to pay?
Nonprofits in Tennessee are exempt from federal income taxes, but may be required to pay state and local taxes such as sales tax, property tax, and unemployment insurance.
What are the benefits of starting a nonprofit in Tennessee?
The benefits of starting a nonprofit in Tennessee include being able to serve the community and help those in need, having access to tax-exempt donations and grants, and having the ability to take advantage of various tax exemptions and deductions.
What information do I need to file for tax-exempt status with the IRS for my nonprofit in Tennessee?
In order to file for tax-exempt status with the IRS for your nonprofit in Tennessee, you will need to provide information such as the name and address of the organization, a description of the activities of the organization, and the amount of money raised and expenses incurred by the organization.
How long does it take to obtain tax-exempt status for my nonprofit in Tennessee?
It typically takes the Internal Revenue Service (IRS) 3-6 months to process the application for tax-exempt status for nonprofits in Tennessee.
What are the rules for fundraising for a nonprofit in Tennessee?
The rules for fundraising for a nonprofit in Tennessee include registering with the Tennessee Secretary of State, obtaining any applicable permits or licenses, and complying with applicable state and federal laws and regulations.
What are the rules for distributing funds from a nonprofit in Tennessee?
The rules for distributing funds from a nonprofit in Tennessee include following the organization’s mission statement, adhering to any applicable state and federal laws and regulations, and obtaining any applicable permits or licenses.
What is the best way to find volunteers for a nonprofit in Tennessee?
The best way to find volunteers for a nonprofit in Tennessee is to use a combination of online resources, such as social media, volunteer-matching websites, and community calendars, as well as traditional methods such as word-of-mouth and local outreach.
What are my responsibilities as a nonprofit board member in Tennessee?
As a nonprofit board member in Tennessee, your responsibilities include understanding and abiding by the organization’s mission statement, exercising sound financial management, and ensuring compliance with all applicable state and federal laws and regulations.
What are the rules for managing donations for a nonprofit in Tennessee?
The rules for managing donations for a nonprofit in Tennessee include accurately accounting for all donations, ensuring that all donations are used in accordance with the organization’s mission statement, and complying with all applicable state and federal laws and regulations.
What is the process for filing annual reports with the Tennessee Secretary of State?
The process for filing annual reports with the Tennessee Secretary of State includes submitting a report of the organization’s activities, financial information, and other relevant information, as well as submitting filing fees.
Are nonprofits in Tennessee required to have liability insurance?
Yes, nonprofits in Tennessee are required to have liability insurance to protect the organization from potential lawsuits and other liabilities.
What is the process for obtaining permits and licenses for a nonprofit in Tennessee?
The process for obtaining permits and licenses for a nonprofit in Tennessee will vary depending on the type of organization and the permits or licenses that are required. Generally, you will need to contact the appropriate state or local agency to obtain the necessary permits or licenses.
Are there any special regulations for nonprofits in Tennessee?
Yes, there are special regulations for nonprofits in Tennessee, such as the Tennessee Charitable Solicitations Act, the Tennessee Charitable Contributions Act, the Tennessee Nonprofit Corporation Act, and the Tennessee Nonprofit Corporation Regulations.
How do I find grants for my nonprofit in Tennessee?
The best way to find grants for your nonprofit in Tennessee is to research foundations and other organizations that offer grants to nonprofits in the state, as well as searching for grants on grant-matching websites and other online resources.
What are the rules for hiring employees for a nonprofit in Tennessee?
The rules for hiring employees for a nonprofit in Tennessee include following the organization’s mission statement, complying with state and federal labor laws, and obtaining any applicable permits or licenses.
What is the process for obtaining a Tennessee sales tax exemption for my nonprofit?
The process for obtaining a Tennessee sales tax exemption for your nonprofit includes filing an application with the Tennessee Department of Revenue, providing relevant documentation, and being approved by the Tennessee Department of Revenue.
Is there any special paperwork required to open a bank account for a nonprofit in Tennessee?
Yes, in order to open a bank account for a nonprofit in Tennessee, you will need to provide paperwork such as your Articles of Incorporation, IRS Form 1023, and any applicable state or local permits.
What are the rules for advertising for a nonprofit in Tennessee?
The rules for advertising for a nonprofit in Tennessee include adhering to any applicable state and federal laws and regulations, and obtaining any necessary permits or licenses from the state or local government.
Are there any special rules for accounting for a nonprofit in Tennessee?
Yes, there are special rules for accounting for a nonprofit in Tennessee, such as following the Generally Accepted Accounting Principles (GAAP) and filing annual financial reports with the Tennessee Secretary of State.

Also Read

Why Tennessee Nonprofit Corporation is So Important

Tennessee Nonprofit Corporations serve as a hub for philanthropic efforts and community activism, providing a platform for citizens to band together and work towards common goals. By registering as a nonprofit corporation, groups can access tax exemptions and other benefits that enable them to allocate resources efficiently towards their missions. This structure not only incentivizes individuals to give back but also ensures transparency and accountability in their operations.

In Tennessee, where communities may face unique challenges such as economic disparities, healthcare access issues, or environmental concerns, nonprofit organizations play a crucial role in creating positive change. By focusing on areas that may be underserved by traditional institutions, nonprofit corporations can fill critical gaps and improve the quality of life for residents throughout the state.

Nonprofit corporations in Tennessee are particularly well-suited to address the diverse needs of the state’s residents. Whether it be providing essential services to underserved populations, preserving cultural heritage, or advocating for policy changes, these organizations serve as engines of progress and innovation. By fostering collaboration among stakeholders and leveraging the passion and expertise of dedicated volunteers, Tennessee Nonprofit Corporations are able to make a lasting impact on the communities they serve.

Moreover, Tennessee Nonprofit Corporations contribute to the state’s economy by creating jobs, stimulating local businesses, and attracting grant funding or donations from outside sources. These organizations are often instrumental in driving economic revitalization in distressed areas, supporting entrepreneurship, and promoting a culture of giving back. By fostering a vibrant nonprofit sector, Tennessee can build a more resilient and inclusive economy that benefits all residents.

Through their advocacy efforts and service delivery models, Tennessee Nonprofit Corporations amplify the voices of marginalized communities, advocate for justice and equality, and catalyze systemic change. By harnessing the collective power of individuals united by a common cause, these organizations can tackle complex issues such as poverty, education reform, or environmental degradation that may otherwise go unaddressed.

In conclusion, Tennessee Nonprofit Corporations are indispensable to the state’s social fabric and economic vitality. By providing a platform for civic engagement, collaboration, and impact-driven initiatives, these organizations empower citizens to shape their communities and build a brighter future for all residents. As the challenges facing Tennessee’s communities continue to evolve, the role of nonprofit organizations in driving innovation, solidarity, and progress will remain paramount. It is essential that we support and nurture the nonprofit sector to ensure a thriving and resilient state for generations to come.

Conclusion

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

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