Are you looking to start a nonprofit corporation in Virginia, 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 Virginia.
To get started, please reference our 11-step guide below or hire a professional online incorporation service to get started.
How to Form a Virginia 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 check for name distinguishability on the Virginia State Corporation Commission 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 Virginia.
At this time, you should also choose your initial board of directors.
In Virginia, you are required to have at least one person on your initial board.
3) Designate a Registered Agent
Virginia 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 Virginia 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 Virginia Secretary of State says that,
Every Virginia and foreign business entity authorized to transact business in Virginia is required by law to continuously maintain in the Commonwealth a registered office and a registered agent. The sole statutory duty of the registered agent is to forward to the business entity at its last known address any process, notice or demand that is served on the registered agent. A business entity may not have, at any given time, more than one person serving as its registered agent in Virginia.”
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 Virginia 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
- Provisions for the membership of your corporation
- How the initial director(s) can appoint successors
- Name of your initial corporation
- Address of your initial registered office
- Name and address of each initial director
- Signature and printed name of each incorporator
Once you’ve finished filling out this form, you’ll need to write a check for $75 and mail it along with your Articles of Incorporation to the following address:
State Corporation Commission
Office of the Clerk
P.O. Box 1197
Richmond, Virginia 23218-1197
The Virginia State Corporation Commission typically processes nonprofit corporation formations within 1-3 business days of receiving your articles. 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 Virginia Tax Exemption
Most nonprofit entities in Virginia can apply for certain tax exemptions. When it comes to income taxes, Virginia defers to the IRS’s designation for tax-exempt nonprofits. If you receive this designation from the IRS, then you’ll be automatically exempt from the state’s corporate income tax. For sales taxes, however, you’ll need to do a little more legwork. You’ll first need to apply for a sales tax exemption certificate with the state. For more information on this important step, the Nonprofit Exemptions FAQs (provided by Virginia Tax) can help.
9) Register for Charitable Fundraising
In Virginia, nonprofit corporations are required to register with the Office of Charitable and Regulatory Programs in order to receive and solicit charitable contributions. To learn more, check out the state’s charitable solicitation page. Then you’ll be ready to raise funds for your cause.
10) Obtain Business Licenses and Permits
While Virginia 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.
For one, Virginia 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 database 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 Virginia which require local licenses:
11) Acquire Insurance
Every business with employees located in the state of Virginia 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 Virginia businesses by visiting the Virginia Employment Commission and/or Workers’ Compensation Commission 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 Virginia 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 Virginia to help you out in case you get stuck.
As for the state of Virginia, if you require assistance, you can always turn to the Center for Nonprofit Excellence. In their own words, the CNE exists to “provide education, consulting and resources to create strong leaders, effective managers and healthy collaborators.” The CNE does require membership, but joining grants you several advantages, including increased access to grant opportunities, networking, 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 Virginia. 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 Virginia nonprofit corporation process, and we wish you the best of luck with your new charitable organization!