Are you looking to start a nonprofit corporation in Ohio, 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 Ohio.
To get started, please reference our 11-step guide below or hire a professional online incorporation service to get started.
How to Form an Ohio 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 Search by Business Name on the Ohio 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 Ohio.
At this time, you should also choose your initial board of directors.
In Ohio, you are required to have at least three people on your initial board.
3) Designate a Registered Agent
Ohio 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 Ohio 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 Ohio Secretary of State says that,
All business entities are required to appoint and maintain a statutory agent. A statutory agent will be served all legal documents regarding your business entity and is responsible for sharing this information with you. As such, the agent should be chosen carefully…The statutory agent must be one of the following: (1) A natural person who is a resident of this state; or (2) A domestic or foreign corporation, nonprofit corporation, limited liability company, partnership, limited partnership, limited liability partnership, limited partnership association, professional association, business trust, or unincorporated nonprofit association that has a business address in this state.”
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 Ohio is the Articles of Incorporation.
This three-page document (plus a cover page) includes all of the vital information describing the organizational structure of your nonprofit, including the following information:
- Name of your nonprofit corporation
- Location of your principal office
- Effective date of your organization (if different from filing date)
- Purpose for your corporation
- Appointment of your registered agent, including the name, address, and signatures from both the incorporators and the agent designating agreement
- Signatures of incorporators
Once you’ve finished filling out this form, you’ll need to write a check for $99 and mail it along with your Articles of Incorporation to the following address:
Ohio Secretary of State
P.O. Box 670
Columbus, OH 43216
The Ohio Secretary of State typically processes nonprofit corporation formations within 3-7 business days of receiving your articles (there are also several expediting options as listed on the form). This processing time assumes that all of your information has been filed correctly.
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 Ohio Tax Exemption
Ohio does not directly grant exemption from taxes; instead, the state defers that to the IRS. If you apply for and receive a letter of exemption as a 501(c)3 corporation from the IRS, then you will not be expected to pay the state’s commercial activities tax. That said, you’ll still be expected to file a tax return so the state is aware of your financial activities. Additionally, you’ll still be responsible for paying sales and use taxes on non-exempt purchases. For more information on this important step, the Secretary of State’s guide to starting a nonprofit can help.
9) Register for Charitable Fundraising
In Ohio, nonprofit corporations are required to register with the attorney general in order to receive and solicit charitable contributions. You’ll also need to submit an annual report of your financial activities each year. To learn more, check out the state’s charitable registration page. Then you’ll be ready to raise funds for your cause.
10) Obtain Business Licenses and Permits
The state of Ohio requires that all businesses obtain a license to operate in the state. You can obtain it simply by registering with the Secretary of State. In addition, there are also hundreds of industry-specific permits and licenses that you may need to acquire for your organization.
For one, Ohio upholds the licensing requirements of any federally-regulated industries. Check here to determine if your business must be licensed by a federal agency.
You’ll also want to take a look at the state’s list of licenses and permits to determine if any of them will apply to your nonprofit corporation.
Your city or county may also require general business licenses. Here some of the largest cities in Ohio which require local licenses:
11) Acquire Insurance
Every business with employees located in the state of Ohio is required by law to obtain two different kinds of insurance policies: workers’ compensation and unemployment insurance.
You can learn more about these insurance types and how they apply to Ohio businesses by visiting the Department of Job and Family Services and/or Bureau of Workers’ Compensation 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 Ohio 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 Ohio to help you out in case you get stuck.
As for the state of Ohio, if you require assistance, you can always turn to Business Volunteers Unlimited. In their own words, BVU “engages businesses and employers to help address and solve critical community issues that affect the lives of so many.
Our powerful platform enables businesses to pursue purpose-driven community engagement, volunteerism and nonprofit board participation, effortlessly, effectively.” BVU does require membership, but joining grants you several advantages, including consulting, team projects, education, and more, so joining will be worth your while.
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.
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 Ohio. 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 Ohio nonprofit corporation process, and we wish you the best of luck with your new charitable organization!