Source: https://www.harborcompliance.com/information/how-to-start-a-non-profit-organization-in-kentucky
Timestamp: 2016-02-06 22:55:44
Document Index: 601392949

Matched Legal Cases: ['§273', '§273', '§273', '§273', '§273', '§273', '§273', '§ 367']

How to Start a Non-Profit Organization in Kentucky | Harbor Compliance
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Welcome to our Kentucky nonprofit resource guide! This free guide
you understand how to start your nonprofit in Kentucky and become
tax exempt. You will find step-by-step instructions and get answers to common
like "what does it cost?" and "how many board members do I need?".
If you're starting out with little or no funds, gaining professional assistance
an option. In that case, you may want to commit to researching the process and
government applications on your own. This route is not for the faint of heart
certainly achievable if you work diligently. The following step-by-step guide
help you as you undertake this process.
1 Confirm a New Nonprofit is Necessary
As you begin, take a moment to consider if you should start a new non-profit organization.
According to the National Center for Charitable Statistics, there were over 16,000 nonprofit
organizations in Kentucky in 2013. To decide if a new nonprofit is necessary...
Research if an organization already exists in your area that serves your cause. By working together
you avoid diluting the effect of fundraising dollars and volunteer hours available in your
Consider fiscal sponsorship, in which an umbrella 501(c) organization incubates your
charitable nonprofit. Fiscal sponsors permit your cause to receive tax-deductible donations and
often handle administrative paperwork.
2 Understand the Benefits of
This guide focuses on starting a nonprofit corporation, the traditional nonprofit legal structure. This
legal structure has a few key benefits. First and foremost, the nonprofit corporation limits the
liability of the organization's officers and directors. Second, the nonprofit corporation is familiar to
donors and grant makers. Lastly, nonprofit corporations meet a wide range of IRS eligibility
requirements, in particular those relating to the 501(c)(3) application.
3 Check Name Availability
The legal name of your nonprofit corporation may not conflict with any other registered name. Check
availability of your desired name by conducting a name search.
Kentucky FastTrack
End with the word "corporation," "company," or "limited" or the abbreviation "Corp.," "Inc.," "Co.,"
or "Ltd." or words or abbreviations of like import in another language, provided, however, that if a
nonprofit corporation's name includes the word "company" or the abbreviation "Co.," it may not be
immediately preceded by the word "and" or the abbreviation "&". KRS §273.177
4 Recruit Incorporators and/or Initial
Identify the incorporators. These individuals will execute the articles of incorporation and submit
them to the state. Kentucky only requires a minimum of one incorporator (KRS §273.243).
Recruit initial directors for your nonprofit
board of directors. In Kentucky, naming the initial directors in the articles of
incorporation is required KRS §273.247. A minimum of three directors are
required and the number of directors must be set in the bylaws, except the initial number which is
set in the articles (KRS §273.211).
Nonprofits often begin working with us before they incorporate and select a board. We help you
understand state and IRS requirements as you select your board members.
5 Appoint a Registered Agent
Identify the nonprofit’s Kentucky registered
agent. A registered agent is a legal appointee who is responsible for receiving legal notices
for your nonprofit. Your registered agent must be physically located in Kentucky and
maintain an office that is open during regular business hours.
We provide a convenient service to act as your Kentucky registered agent. As part of that
service, our local office in Richmond, KY receives your legal documents and sends
you notifications. You view your documents in your secure online account. Registered agent is included
in our nonprofit formation service or you can sign up for this service separately.
We're committed to publishing free informational
such as this how-to guide. Our resources have been shared by important
Below is an overview of the paperwork, cost, and time to start
an Kentucky nonprofit.
Form NAI: Non-profit Corporation Articles of Incorporation
Form 10A100: Kentucky Tax Registration Application
Form 51A125: Application for Purchase Exemption - Sales and Use Tax
Kentucky Charitable Registration Cost
Incorporation: $8
501(c): $400 or $850 IRS fee Time
Incorporation: ~3-5 business days by mail or online. While you wait if you file in-person.
501(c): 2 weeks to 3 months 6 File Kentucky Nonprofit Articles of
File articles of incorporation to create your non-profit corporation.
Agency:Kentucky Secretary of State Form:Form NAI: Non-profit Corporation Articles of IncorporationFiling Method:Mail, in-person, or onlineState Fee:$8Turnaround:~3-5 business days by mail or online. While you wait if you file in-person.Law:Kentucky Revised Statutes - Chapter 273 Adding 501(c) provisions into your articles
The IRS requires specific language in the articles of incorporation to qualify for 501(c)(3) federal
tax exemption. These provisions are not always included in state articles of incorporation
templates. Refer to IRS Pub
557 for guidance and sample language.
7 Establish Organization Records
"Each corporation shall keep correct and complete books and records of account..." (KRS §273.233.
Your filed articles of incorporation is the first document for your nonprofit corporate records. Your
corporation will generate many other official records such as bylaws, meeting minutes, and your
Office supplies intended for a nonprofit corporation will help you stay organized and save time.
Optionally, get a nonprofit records kit.
Draft bylaws which is the governing document for the
nonprofit. The bylaws may contain any provisions for the regulation and management of the affairs of a
corporation not inconsistent with law or the articles of incorporation (KRS §273.191).
You will review and ratify the bylaws at your first board of directors meeting. The Board should create and adopt a conflict of interest policy. This document is submitted to the IRS at
the time they apply for 501(c)(3) tax exemption.
8 Hold Organizational Meeting of the
Hold the first meeting of the board of directors or incorporators (KRS §273.257).
At this meeting, the nonprofit should approve the bylaws, elect additional directors, appoint officers,
and approve initial resolutions such as opening a company bank account. Keep minutes of this meeting.
9 Get a Federal Employer Identification
Your nonprofit must obtain an EIN regardless of whether it will
hire employees. Agency:Internal Revenue Service (IRS) Form:IRS Form SS-4Guidance:IRS Pub 1635: Understanding Your EINFiling Method:Mail, phone, fax, or onlineIRS Fee:$0Turnaround:Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.Notes:The IRS website is only available during certain hours. Print your EIN before closing your session. 10 Get Kentucky State Tax Identification
Numbers/Accounts
Register with the Kentucky Department of Revenue within 30 days of incorporation for
applicable tax accounts
~5-10 business days
You may also need to file other Kentucky Registration Applications.
Harbor's responsiveness and realistic understanding gave our organization a great start.JohnThe Alumni Society of San SebastianHarbor helped me understand what's needed and why, and they pointed out the details that I didn't
bother to pay attention to! They took care of the whole thing.MarilynSynergize! 11 Apply for 501(c)
Applying for 501(c) tax exemption is often the most complex and time-consuming steps in setting up a
nonprofit. It is also one of the most important, as obtaining a tax exemption is what is enables an
organization to successfully raise funds, apply for grants, be exempt from IRS income tax, and enjoy a
variety of other benefits exclusively available to nonprofits.
501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Most
nonprofits are 501(c)(3)s, including charities and foundations. There are a few forms used to apply for
federal tax exemption. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Not all organizations
however are eligible to file the streamlined Form 1023-EZ. Other types of nonprofits, including
501(c)(4)s and 501(c)(6)s, apply using Form 1024.
Seeking the help of a professional with this step is common. Choosing the right form to file is just one
consideration. A great deal of expertise, time, and preparation goes into creating a successful
application. The IRS estimates over 100 hours are spent on researching and preparing the application. If
you're looking for professional assistance, check out our formation services to
help you with your 501(c) application and the rest of the process. Our nonprofit specialists will help
Agency:Internal Revenue Service (IRS) Form:IRS Form 1023, IRS Form 1023-EZ, or IRS Form 1024Instructions:IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024. Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization.Filing method:MailIRS Fee:$400 or $850Turnaround:1023-EZ average: <1 month. 1023 average: 3-6 months. The IRS will return a Determination Letter which officially recognized your exemption.
12 Apply for Kentucky Tax Exemption(s)
Your nonprofit is automatically exempt from Kentucky corporate income tax when you receive IRS income tax
Your nonprofit may be able to obtain exemption from Kentucky sales and use tax. To apply:
Include a copy of your articles of incorporation and IRS Determination Letter.
13 Register for Charitable Solicitation /
Before soliciting donations or hiring professionals solicitors, you must register in each state
where you will raise funds.
To file in Kentucky:
Agency:Kentucky Attorney General - Charities Exemptions:All IRS tax-exempt nonprofits must register. Kentucky exempts:
PTAs and student groups
Check the law for the full list of exemptions and exemption criteria.Form:There is no prescribed form. File by mail:
A copy of the most recent IRS 990 (or URS, if not available)
A copy of the By-laws
Filing method:MailState Fee:$0Due:Charitable organizations must register with the Kentucky Attorney General prior to soliciting. Law:Kentucky Revised Statutes Ann. §§ 367.650, 367.657 et seq.Disclosures:No.Online fundraising:Kentucky follows the Charleston Principles regarding when your nonprofit needs to register due to online fundraising.
Accepts URS:Yes To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage
your initial, renewal, and exemption filings in every state.
14 Obtain Other Business Licenses &
To run your business legally, you must obtain applicable licenses and permits. The easiest way to
navigate the wide range of federal, state, and local requirements is to search by your business type and
locality using the Small
Business Administration Business License & Permit look-up tool.
Kentucky nonprofits who wish to conduct bingo, raffles, and other charitable gaming must register with
the Kentucky Public
Protection Cabinet - Department of Charitable Gaming by filing Form CG-1:
Kentucky Application for License for Charitable Organization ($25 state fee).
* Ongoing Filings to Maintain Your Nonprofit
Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our Kentucky nonprofit compliance guide to learn more!
Continue reading "Kentucky Nonprofit Compliance" Tax-Exempt in 2 Weeks!
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This page was last fact-checked September 27, 2013.
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