How to Form a Kentucky Nonprofit Corporation

Are you looking to start a nonprofit corporation in Kentucky, but you’re not entirely familiar with how the formation process works?

Forming a nonprofit organization can have some tricky compliance requirements, and you don’t want to risk making any mistakes during this process. In this guide, we’ll discuss all the relevant details of forming a nonprofit corporation in Kentucky.

To get started, please reference our 11-step guide below or hire a professional online incorporation service to get started.

How to Form a Kentucky Nonprofit Corporation (in 11 Steps)

1) Name Your Nonprofit

The first step for forming a nonprofit organization in any state is to come up with a strong name for it. Remember that the name of your nonprofit is often your best opportunity to make a good first impression with people, and you should clearly describe your organization’s mission in your name.

Before you become too attached to one name idea, you should run a business name availability search on the Kentucky Secretary of State website. This will tell you if someone else is already using your desired name, or if it’s available for your nonprofit to use.

2) Designate an Incorporator and an Initial Board of Directors

The incorporator is the person who is responsible for preparing, signing, and filing your nonprofit’s Articles of Incorporation. This document is the form that officially creates your organization with the state of Kentucky.

At this time, you should also choose your initial board of directors.

In Kentucky, you are required to have at least three people on your initial board.

3) Designate a Registered Agent

Kentucky nonprofit corporations must designate a person or business to receive legal notices on behalf of the company. This important point of contact is known as the registered agent. You will be required to list the registered agent’s name and address when filing the Articles of Incorporation.

Who Can Be My Registered Agent? A registered agent must have a physical address within the state of Kentucky where mail and legal notices can be served during regular business hours. You can hire a service to act as your registered agent, serve as your own registered agent, or even use an accountant or other business professional’s address – with their consent, of course.

The Kentucky Secretary of State says that,

each entity must designate a registered agent and registered office in Kentucky upon whom process (such as summons and subpoenas) may be served. Service on the registered agent is deemed to be service on the entity, regardless whether the registered agent actually forwards the notice to the entity.”

Our Recommendation

We recommend hiring a professional registered agent service to act as your registered agent. Doing so will help eliminate junk mail and more importantly, keep your personal and/or corporate or personal address off the public record.

4) File the Articles of Incorporation

The official document required to form your nonprofit corporation with the state of Kentucky is the Articles of Incorporation.

This one-page document includes all of the vital information describing the organizational structure of your nonprofit, including the following information:

• Name of your nonprofit corporation
• Purpose for which your nonprofit is organized
• Name and address of your registered agent
• Number of directors constituting the initial board
• Names and addresses of initial directors
• Name and address of incorporator
• Effective date
• Signature of incorporator
• Signature of registered agent

Once you’ve finished filling out this form, you’ll need to write a check for $8 and mail it along with your Articles of Incorporation to the following address:

Alison Lundergan Grimes
Secretary of State
P.O. Box 718
Frankfort, KY 40602

The Kentucky Secretary of State typically processes nonprofit corporation formations within three business days of receiving your articles.

5) Acquire an EIN

According to the IRS, every nonprofit corporation should obtain a federal tax ID number, otherwise known as an employer identification number (EIN).

The EIN enables your nonprofit to hire employees, open business bank accounts, and file for 501(c)(3) tax exempt status. The process to acquire an EIN is quite simple, and includes the preparation and filing of one simple form. Obtaining an EIN is also free.

6) Establish Bylaws and a Conflict of Interest Policy

Think of the bylaws as a governing document for how your nonprofit corporation will be operated. Bylaws outline procedures for things like holding meetings, outlining your membership structure, defining your corporate purpose, describing the responsibilities of your board of directors, and other important details.

A conflict of interest arises when a contributor to your nonprofit has personal interests that compete with those of your corporation.

The conflict of interest policy protects your nonprofit in these situations. It includes a duty to disclose clause that says anyone involved with your nonprofit must disclose any financial interests and material facts to your directors. It also outlines procedures for addressing conflicts of interest if they ever arise.

7) Hold an Initial Meeting and Establish Your Corporate Record

At this point, you’re ready to hold an initial organizational meeting with your board of directors. At this important meeting, you need to elect directors and officers, approve the bylaws and conflict of interest policy, and adopt resolutions.

As with any meeting of your nonprofit corporation, you should take detailed notes of everything that takes place. This documentation can then become part of your corporate record, which is a permanent written record of all important organizational decisions.

8) File for Kentucky Tax Exemption

You can now apply for tax exemption from the state of Kentucky. If your nonprofit corporation is domestic to Kentucky, and is either a religious, charitable, or educational entity, you can acquire an exemption from sales and use tax. For more information on this important step, the Kentucky Department of Revenue can help.

9) Register for Charitable Fundraising

The guidelines for this step are quite similar to the previous step. You will need to register with the state of Kentucky prior to soliciting any donations for your nonprofit corporation, which means filing a notice of intent to solicit with the state Attorney General. You are also required to include copies of your bylaws and Articles of Incorporation with your notice of intent.

If your organization has multiple chapters or branches, each of them will need to file a separate notice, either with the Attorney General or with the parent organization, which can then compile them and submit them all to the Attorney General.

10) Obtain Business Licenses and Permits

While Kentucky does not have a general business license that applies to all companies operating in the state, there are hundreds of industry-specific permits and licenses that you may need to acquire for your organization.

Take a look at the state’s list of occupational permits and licenses to determine if any of them will apply to your nonprofit corporation. There are also county-level occupational licenses that you may need to acquire. Learn more at this link.

11) Acquire Insurance

Every business with employees located in the state of Kentucky is required by law to obtain two different kinds of insurance policies. According to the Kentucky Secretary of State, “If you hire employees, your business is required to register for unemployment insurance to operate in Kentucky. Kentucky also requires workers’ compensation insurance.”

You can learn more about these insurance types and how they apply to Kentucky businesses by visiting the Division of Unemployment Insurance and/or Department of Workers’ Claims websites. No matter what line of business your nonprofit is in, you need these policies.

In addition, you should also pursue general liability insurance and other more industry-specific types of insurance, but these are not legally required.

Where Can I Find Help for My Kentucky Nonprofit?

The process of forming and maintaining nonprofit corporations can be tricky, no matter which state you’re located. Fortunately, there are great resources in Kentucky to help you out in case you get stuck.

As for the state of Kentucky, if you require assistance, you can always turn to the Kentucky Nonprofit Network. In their own words, the Kentucky Nonprofit Network exists “to strengthen and advance our sector through a unified public policy voice, education, technical assistance, networking opportunities, and sharing of best practices.” The KNN does require membership, but they offer a wide variety of learning tools and nonprofit advocacy programs that make it worthwhile.

In addition, if you would rather hire a service to incorporate your nonprofit for you, that’s an option as well. There are plenty of services that can handle much of the formation process, leaving you more time to focus on the actual operation of your nonprofit corporation.

These service providers (like Northwest Registered Agent) also offer valuable and convenient bonus features, like the inclusion of a full year of registered agent service with the purchase of a nonprofit formation package. They can save you a considerable amount of hassle, and all without costing an arm and a leg.

Conclusion

As you can see, there are quite a few crucial steps that you’ll need to take if you want to form a compliant nonprofit corporation in the state of Kentucky. However, it’s important to remember that if you need help at any time, it is available to you ― you don’t need to DIY the entire process.

We hope this guide helped you understand the details of the Kentucky nonprofit corporation process, and we wish you the best of luck with your new charitable organization!