Starting a Non Profit in Florida
Do you have a cause for which you are supremely devoted and want to start a non-profit organization to educate the world about it? There’s a corporate entity for that. If you want to Save the animals or nature, it is worth considering starting your cause as a non-profit organization.
What are the benefits of incorporating?As with most corporate entities, the benefit lies mainly in their autonomy and their ability to allow you to pursue your goals without getting your personal assets entangled in the process. In the non-profit corporate world, the corporation is its own entity that is capable of negotiating contracts and agreements, signing those agreements, and suing and being sued. There are also tax benefits to being a non-profit. Some may qualify for exemption from property, income, and other taxes.
When do I get to be a 501(c)(3)? That is a decision made by the Internal Revenue Service after you file a Form 1023 and pay $400 as an application fee. It is also a decision that has some advantages and disadvantages. On the one hand, if you have this designation, donors can deduct the amount of their donation to your organization on their taxes. On the other hand, there is a lot more paperwork and managing involved. Plus, you cannot use the organization to directly or indirectly participate in the campaign of any candidate for elective public office. It is important to make the decision one way or the other, however, before you get too much farther into the process. This is a great question to ask an attorney who specializes in non-profit organization, like me, to ensure that you understand the risks and benefits and make an informed choice.
What are the disadvantages of incorporating?A lot of thought and planning needs to go into the decision and execution of setting up the corporation. You may have difficulty attracting talented people to help you since you will probably ask them to be volunteers and give their time and services for free. Another drawback is that while the corporation will be autonomous, that does not necessarily mean that you will be. There may be donors whose wishes must be taken into consideration as well as a board of directors. If you want to be the captain of your ship, this may not be your boat.
How to get startedFirst, draw up a mission statement or declaration of the purpose of your organization. Spend time brainstorming what you want to accomplish, whom you want to have help you, and how you want to get there. The big picture is important - glitter is good! - However, specifics on the goals of your organization and how to achieve them are keys to success.
Once you have got your mission statement, here are the next steps:
Find a name. Non-profits that are registered with the state cannot use the same name as
another nonprofit. Per Florida Department of State's regulations, the name of your organization must be distinguishable from all other organizations on file with them. Florida is a big state, so be creative. Moreover, don't forget that it must include "Corporation," "Incorporated," "Corp.", or "Inc.".
Check to make sure that your chosen name is available. Thanks to the internet, you
can get relatively instant gratification on this count. The corporation division of the Department of State has a nifty name search option. So, before you commit, make sure it is legit.
Recruit your board of directors. Florida does not allow non-profit organizations to be
run by just one person. You must have at least three (3) individuals on the board of directors. This means you need to find at least two (2) other people who are as passionate about your cause as you are to be on your board with you being the third person. These individuals must be over the age of 18.
Prepare and file your articles of incorporation with the Department of State
Corporations Division. It is time to make your organization official. The articles of incorporation once filed with the Corporations Division have the effect of officially establishing your entity. The articles themselves are fairly perfunctory but do require some important choices to be made. Specifically, you must identify the principal place of business, a mailing address (if different from the principal place of business), the names and addresses of all members of the board, and a corporate purpose, such as school, animal rescue, etc. Finally, you must also designate a registered agent who along with the incorporator, must sign the articles of incorporation before they can be filed.
Wait, what's a registered agent? Since the corporation is considered its own legal
entity, it must have someone who is appointed to receive service of process - i.e., notices of lawsuits - on behalf of the corporation. The agent can be another business provided it has an active Florida registration. Lawyers often serve as registered agents. Any individual who is associated with the corporation, as a member of the board, can also serve as registered agent. Regardless, the registered agent must have a physical street address in Florida. P.O. Boxes cannot be used for this purpose.
Also, if you have decided to go for federal tax exempt status, you must include certain language in the articles to that effect.
Create your bylaws. Unlike the articles of incorporation, your bylaws will probably be
at least several pages. The bylaws are the rules by which your organization operates, appoints new members, makes decisions about