A tax-exempt organization must be organized as an entity apart from its founders. The Internal Revenue Code and Treasury Regulations permit an exempt organization to organize under the laws of any state as a corporation, unincorporated association, or trust. Most organizations are formed as corporations and our sample documents below reflect such common practice. Is important to note these documents are provided for illustrative purposes only. It is essential to review applicable state law and federal tax requirements, including the organizational requirements under Section 501(c)(3).
Articles of Incorporation
An organization that desires to be recognized under section 501(c)(3) of the Internal Revenue Code must include certain provisions in its Articles of Incorporation, including a specific purpose clause and a dissolution clause. Although states generally provide sample nonprofit Articles of Incorporation, several states do not include these provisions in their forms. The sample documents below incorporate federal and state requirements.
- Missouri Articles of Incorporation
- IL Articles of Incorporation and Attachment
- Delaware Articles of Incorporation
- California Nonprofit Articles of Incorporation
- Arizona Articles of Incorporation
- Georgia Articles of Incorporation
- Kansas Articles of Incorporation
- New York Certificate of Incorporation
Bylaws contain provisions for regulating and managing the affairs of the corporation that are not inconsistent with law or the articles of incorporation. Examples of common provisions in the bylaws include the location of the corporate offices, the method for selection, removal, tenure, etc., of the board of directors, members, and officers of the corporation, meetings, compensation, the corporation’s fiscal year, and procedures for amending the bylaws.
Conflict of Interest Policy
Although adoption of a conflict of interest policy is not required under Section 501(c)(3), the Service recommends each nonprofit organization seeking exemption under Section 501(c)(3) adopt such a policy. Indeed, the recently revised IRS Form 1023, “Application for Recognition of Exemption,” includes a suggested conflict of interest policy for adoption by Section 501(c)(3) organizations. If an applicant-organization does not adopt a conflict of interest policy, the organization must explain, as part of the application process, how the organization will prevent conflicts of interest in certain circumstances (including in preventing influence over compensation and business deals). It is also important to note, addressing conflicts of interest is an important part of the Service’s recent focus on governance of Section 501 (c)(3) organizations.
- Sample Conflict of Interest Policy
- Short Form Conflict of Interest Policy
- Sample Conflict of Interest Statement
After the articles of incorporation are filed, the board of directors must hold an organizational meeting to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting. Other business of the organizational meeting may include (i) setting the governing body’s annual meeting; (ii) authorizing federal, state, and local tax filings; (iii) authorizing the acceptance of gifts, contributions, fees, as appropriate; (iv) selecting the fiscal year; (v) making bank account resolutions; and (vi) authorizing engagement of legal, accounting, investment, and other professionals.