Reference Links for Forming a Nonprofit in Connecticut
- Small Business Administration – License and Permits
- CT.gov – New Business Checklist
- CT.gov – Department of Revenue Services – Nonprofit Tax Guidance
- IRS – Applying for Tax-Exempt Status
- IRS – Information for Charities & Nonprofits
These are the steps to take to create a Connecticut nonprofit 501(c),(3) corporation.
Step 1: Choose the initial directors
At its inception, your nonprofit must have at least three directors or officers. This number can be changed later by amending your Certificate of Incorporation and bylaws. However, you must keep at least three officers in order to begin.
Step 2: Select a name
When choosing a name, there are some things you should keep in mind. Your corporation must include the terms “corporation”, “incorporated”, or “company” in its name. Acceptable : “Corp.,” inc., “co.” and abbreviations that have a similar meaning to “Corp.” are all acceptable . Names must be distinctive from all other entities registered with Secretary of State. Here are some examples of restricted names:
- Names that are not distinguishable from other businesses that operate in the state
- Names that are identical or similar to another registered name or reserved name
- Names used in the state by an LLC
It’s a smart idea to search the state business name database to ensure your name isn’t taken. The business domain service will help you find available domain names that match your nonprofit name.
You can reserve a name so that no other company can claim it. The name reservation system can reserve a name for up 120 days. You can reserve a Connecticut business name for $60 through the Secretary of State.
Step 3: Select a Connecticut registered agent
Next, choose a registered agent to represent your nonprofit. A registered agent is someone who is authorized to receive legal documents, such as lawsuit notices, for the nonprofit. There are certain laws that govern who can be your legal agent. They must be either:
- A resident of the state that is at least 18 years.
- Connecticut business
- Connecticut-permitted corporations
You may be interested in our registered agents service. The registered agent must have a physical office and be on-site during business hours. You can meet the requirements of a registered agent while you work on your nonprofit.
Step 4: Get the Certificate of Incorporation
This form will contain important information about your venture, such as:
- A corporate name
- A statement from the corporation stating that it is a non-profit organization and that it will not engage in activities that challenge that status
- The addresses and names of the officers
- Name and address of the registered agent
- The purpose of a nonprofit
It is important that you include a statement of purpose to demonstrate that your organization meets the IRS requirements for tax-exempt status. A Certificate of Incorporation to a Nonstock Corporation in Connecticut costs $50. Online, in-person, and by mail are all acceptable methods of submitting applications. Religious charities must also pay $50, but they must file the Certificate of Formation for a New Religious Corporation/Religious Society. An Application for Certificate of Authority can be filed by existing nonprofits that were established in another state. This costs $40.
Step 5: Submit the initial report
The initial report is essentially a confirmation of what information you have included on your Certificate of Incorporation. It also includes contact information for your officers. This report should be submitted within 30 days after forming your nonprofit.
Step 6: Establish corporate bylaws
Your corporate bylaws will govern the day-to-day operations of your non-profit corporation, the rules that bind employees and the conduct of your directors. Your bylaws should be completed and approved by the board before your first meeting.
Step 7: Host an organizational meeting
The first organizational meeting will appoint officers and directors to their respective positions. They can also adopt the bylaws. You can track decisions and resolutions made by the board at this meeting and any subsequent meetings. This is required by the uniform corporate codes, which apply to non-profits as well as other businesses.
Step 8: Establish a system for keeping records
Organization is essential when you need to keep track of financial reports, tax documents, minutes from board meetings, and other records. While a corporate records binder is an elegant and simple solution, the cloud or another similar format might be more efficient. You will be able to avoid the hassle of losing important documents, such as IRS tax forms.
Step 9: Get your tax ID numbers
To file taxes or hire employees, the IRS requires that corporations have an Employer Identification Number (or EIN).
Step 10: Register to get a state tax ID Number
You may need a Connecticut tax registration number if your nonprofit plans to make sales. After forming your nonprofit, you should consult the Department of Revenue Services in order to determine if your business requires a state registration number.
Step 11: Apply to licenses/permits
To be able to sell items, you may require specific licenses or permits in Connecticut. Consult your local licensing boards. You may also need to request information at either the federal or state level.
Step 12: Apply to tax-exempt status
For businesses who wish to apply for tax exemption, the IRS offers easy instructions and a list of forms. After the confirmation letter from Internal Revenue Service is sent, you should submit it with a tax exemption certificate (DRS) to Connecticut’s Department of Revenue Services. The CERT-112 form is used by most nonprofits. The DRS answers many frequently-asked questions and points out that businesses outside of the state don’t qualify to be exempt from sales or use taxes.
Step 13: Register with the state as a charity
Every corporation that solicits money for charitable purposes must register with Connecticut as a charity. Registering with Connecticut’s Department of Consumer Protection is easy. You can also find a guide on how to claim an exemption if you receive less than $50,000 per year or meet another requirement.
Step 14: Get insurance for your non-profit
Depending on the type of work you do, you will need different insurance policies. Talk to an insurance agent who has experience in providing coverage for Connecticut nonprofits to help you get a comprehensive plan.
Step 15: Open an account in a bank
You can open a bank account to receive and write checks. The bank might ask for the EIN of the nonprofit, as well as information about the founder and officers. This can be discussed at your first organizational meeting.
Those are the basic steps to forming a Connecticut Nonprofit.