How to Get 501c3 Status for Your Nonprofit in Georgia
Starting and maintaining a nonprofit organization in Georgia is a great way to give back to society and be a beacon of positive change by helping those in need. Although starting a nonprofit is a worthy cause, you need to know the right way to start a nonprofit in Georgia.
How to Start a 501c3 for Your Nonprofit in Georgia
To get a 501c3 tax-exempt nonprofit organization in Georgia, you must start by creating a nonprofit organization based on your goals and objectives. You will also need to apply for 501c3 status with the IRS. If this is your first time registering your nonprofit, it can be difficult to fully understand the process. Here are the steps to register your nonprofit in Georgia:
Step 1: Choose a name for your organization
You should start by choosing a name for your organization that meets the naming requirements for nonprofit organizations in Georgia. The name should also be simple so donors and potential members can find it easily. Here are some guidelines you should follow when naming your organization:
- The name of the organization must include “corporation”, “incorporated”, “limited”, “corporation”, or an abbreviation representing one of these words.
- The association name must be less than 80 characters.
- Individuals registering the organization must obtain name approval from the Department of Banking and Finance if the nonprofit name contains “bank” or “banking”.
- The Office of Insurance and Safety Fire Commissioner must give approval to the nonprofit if your organization’s name includes words such as “loyalty”, “insurance” or “insurance”. The approval must be in writing and include the details of the authorization.
Persons registering the association should also check whether the name they have chosen is not already registered. You can do a quick name check to make sure you’re not giving your business a duplicate name. You should also check if a web domain is available for your nonprofit website. Even if you don’t plan to create a website for your organization at the moment, you may need to create one in the future.
Step 2: Choose a registered agent in Georgia
When you run a non-profit organization, you must present a registered agent for the organization. The agent is a trained and registered person who receives documents on behalf of your organization. You can elect someone from the company or even yourself. Or, you can hire a third-party agent for the task.
Choosing the right agent is important because these agents handle future nonprofit business and paperwork on your behalf.
Step 3: Choose your officers and directors
Directors of a nonprofit organization are responsible for making important decisions for the business. They are also responsible for overseeing nonprofit operations and various other duties.
The president, vice president, and secretary are the three main leaders you will need to elect for your organization. Each of them comes with responsibilities for their designations.
However, directors within the nonprofit should not be related to each other. You can create a reliable method for electing your nonprofit’s leaders.
Step 4: Adopt conflict of interest policies and regulations
It is required that any nonprofit applying for a 501c3 have specific conflict of interest policies and regulations. These may include:
These are simple rules that describe the operational process of a nonprofit organization.
Conflict of Interest Policy
Conflict of interest policies are simple rules designed to ensure that all decisions made by the directors of an organization benefit the company and not the management.
Nonprofit organizations must adopt these policies at the first meeting. It clarifies the organization when appointing directors and officers.
Step 5: File the Articles of Incorporation and Transmittal Form for the Nonprofit
The Georgian Nonprofit Incorporation and Submission Form is the next most important step in registering your organization. These articles ensure that your nonprofit organization is eligible for 501c3 status. The organization must explicitly state that:
1. Object of the association
The organization should clarify the main purpose of its operations. The business purpose must be limited to one or more of the following:
- Public Safety Testing
- Prevention of animal/child cruelty
- Promote national/international sports competitions for amateurs
Clarity about the organization’s purpose helps the nonprofit understand its goals and role as a registered organization.
The organization must also clearly state how it will use its assets and what will happen to the assets if the organization dissolves. Organizations that require 501c3 status must use their assets for a purpose for which 501c3 status was approved.
There is a wide range of provisions for this information that you can follow. You can find all the details in section 5 of the sample IRS document.
Step 6: Get approved for an EIN
The EIN or Employee Identification Number helps the federal government identify a business entity. It can also be a federal tax identification number and your organization’s Social Security Number (SSN).
Here’s why you need it:
- You need it if you want to open a bank account for the company.
- The EIN is also required for federal tax purposes.
- EIN also helps in hiring employees for the company
You can get an EIN for free from the IRS or the business owner forming the business (or nonprofit in this case). You can register by mail or online. You can check the EIN details online for more details.
Step 7: Apply for 501c3 status
For a quick recap, when applying for 501c3 status, you should keep in mind:
- Elect three different directors for the board of directors, who must not be related to each other
- Meet the requirements of the articles of incorporation according to the required provisions
- Choose the nonprofit’s conflict of interest and bylaws.
- Get an EIN for your IRS
Once the organization meets all the requirements, you can apply for the 501c3 by filling out Form-1023 online. If the IRC application is accepted, they will let you know. You will receive a letter explaining that your organization is exempt from all federal taxes under section 501c3.
Important Things to Follow After Forming a Nonprofit
After starting a nonprofit, you should also have a plan for what to do next. Maintaining a non-profit organization is more important than starting one. So here are some things to follow after forming a nonprofit organization.
Set up business banking
Finances are an essential part of any non-profit organization, which is why setting up business banking services is important. You should start by creating a business bank account to separate your personal and business assets. You should also get a business credit card for any sudden expenses you may incur. It also improves your credit score and is useful for earning capital later.
Rent a business account
Hiring a business accountant is essential to save your business from overpaying taxes, penalties, and tax errors that can cost thousands of dollars. This can simplify accounting and payroll and avoid unexpected losses for the nonprofit. You can hire an accountant for the company or outsource your finances to another company.
Obtain an insurance policy for the association
An insurance policy is a major part of any nonprofit and can help protect it as the business grows. You can choose from different types of business insurance policies that can protect your business against different forms of liability. General liability insurance, for example, protects you from lawsuits.
Professional liability insurance can protect against malpractice, business error defects and lawsuits. You should also purchase workers’ compensation insurance, which provides coverage when employees become ill, injured or die.
Create a business website
Your nonprofit’s reach plays a vital role in its long-term success, and a business website is a great way to ensure you can better connect with clients and individuals. The website can be a great resource for new users, members, volunteers, or others who want to learn more about your business.
Some nonprofits refrain from creating a designated website for their business because they have no experience with websites. However, with website building tools like Wix and Squarespace, creating a website is not difficult.
Getting a 501c3 for your nonprofit organization is a great way to make it tax-exempt. Organization owners can follow the steps mentioned in this guide to achieve 501c3 status. It’s a great way to start and sustain your nonprofit organization in Georgia. We also recommend that you take the time to find the right insurance policy, an account manager, and other members of the organization to help it run smoothly.
Building a positive reputation for the nonprofit will take some time, but it will get easier once you get established. If you have any further questions and concerns, you should consult a professional at your Georgia nonprofit organization
The Atlanta Small Business Network, from startup to success, we’re your go-to resource for small business news, expert advice, information and event coverage.
While you’re here, don’t forget to sign up for our email newsletter for all the latest business news from the Atlanta Small Business Network know-how.