Study: My Understanding of
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Corporations the world over are categorized into profit-making and nonprofit making. The classification guides the processes involved in setting them up. States such as Florida classify nonprofit corporations as 501C3. 501C3 guides the setting up of the nonprofit corporation.
The internal revenue code is the basis for setting up corporations in the United States. 501C3 happens to be a subsection under this code. It mainly focusses on the laws that govern taxes for nonprofit corporations. Nonprofit corporations in the United States are exempted from paying taxes based on this subsection. There are however conditions attached to this nonpayment of taxes. One of them is that the activities of the corporation must be helpful to the ecosystem such as being educative, religious, scientific among others.
So, how do you establish a 501C3 in a state like Florida? It is mandatory that your corporation has at least three members sitting in the board of directors. The minimum age of such directors is required to be eighteen. The next step involves coming up with a suitable name for your nonprofit corporation. This is followed by writing a mission statement for the corporation. The main reason for setting up the corporation must be captured in the mission statement.
With the mission statement in place, the corporation can then be registered. To have your corporation registered, you need to have a filed article of incorporation. The office of the secretary of state, division of corporations is the place where the article should be filed. Follow this by creating bylaws for your corporation. At this point, you can hold meetings with the board of directors and create a bookkeeping procedure for records.
A registration number for the corporation can be obtained subject to following the above procedures to the latter. Registration of the corporation with the department of revenue can then be done. You should also seek registration at the department of consumer services. The final registration is with the IRS at the particular state. Hiring of staff can happen after registration with IRS. Operations of the corporation can then commence.
There is some extra biodata information about the nonprofit corporation that must be availed to the state and registration agencies. First is the physical address. You can give the street and the general location. Then give the specific purpose of the corporation. Thirdly, you must also declare the formula used to elect directors for the corporation. You must also describe how you will hold elections for the board of directors and all the measures to be put in place for such elections to be smooth and produce fair results. With such measures, the state will be sure that the nonprofit corporation will operate based on transparency and accountability.