Call Today 315-741-5946

Experienced, Reliable and Responsive Representation

With more than 30 years of trial experience, attorney Terry J. Kirwan provides seasoned counsel and advocacy to individuals and business owners in Upstate New York.

What are some considerations for nonprofit formation in New York?

On Behalf of | Jan 27, 2025 | Business Formation |

Starting a nonprofit requires careful planning and attention to specific legal requirements. Nonprofits serve a wide range of purposes, from charitable work to educational programs, and understanding the formation process can help your organization succeed.

Choosing a mission and organizational structure

The first step is defining your nonprofit’s mission. A clear mission helps guide your activities and ensures compliance with state and federal regulations. You must choose an appropriate organizational structure, such as a corporation, and identify at least three directors to oversee the nonprofit’s operations.

Filing a certificate of incorporation

To legally establish your nonprofit, file a Certificate of Incorporation with the New York Department of State. This document must include the organization’s name, address, purpose, and details about the directors. Ensure that the name you choose isn’t already in use by another entity in New York. Adding language in your Certificate that meets IRS requirements for tax-exempt status can simplify the federal application process later.

Applying for tax-exempt status

To gain recognition as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, submit Form 1023 or Form 1023-EZ to the IRS. You’ll also need to register with the New York State Charities Bureau, which regulates nonprofits operating within the state. This registration involves disclosing financial details and complying with ongoing reporting requirements.

Understanding compliance and governance

Nonprofits must follow strict governance rules. These include adopting bylaws, holding regular board meetings, and maintaining detailed financial records. You may also need to register for applicable state taxes and licenses depending on the nonprofit’s activities. Transparency and accountability play a significant role in maintaining public trust and avoiding legal issues.

Staying up-to-date with reporting requirements

New York requires annual filings to ensure nonprofits remain in good standing. These include submitting a biennial statement to the Department of State and annual financial reports to the Charities Bureau. Failing to meet these obligations could result in penalties or the loss of your nonprofit status.

Properly forming a nonprofit lays the foundation for success while helping you stay compliant with state and federal laws.

FindLaw Network