Below is a guide for helping you get your Colorado non-profit organization up and running.
Choose a Name For Your Colorado Non-Profit Organization
If you’re starting a new Colorado non-profit organization, the name is one of the most important things to get right. People will remember your organization if it has a memorable name. Also name recognition assists in fundraising efforts.
Keep in mind that it should not be too similar to other existing organizations. To begin, see if the name is available on the Colorado Secretary of State’s website. Also, check Google and Facebook to see if there is already some organization with the same or similar name.
File Colorado Non-Profit Articles of Incorporation
One of the essential and first documents your non-profit needs to have and file is the Articles of Incorporation. This document legally creates the non-profit corporation. It contains the business address; the name and address of the registered agent; whether there will be voting-members or not; the name and address of the incorporator; and lastly how assets will be distributed upon dissolution of the non-profit. Moreover, the articles are viewable to the general public, so be careful what information you put out there.
Prepare Initial Documents for your Colorado Non-Profit
To start a Colorado non-profit organization, you will need to have the following documents: Articles of Incorporation, bylaws, action by incorporator, initial organization meeting minutes and conflict of interest policy.
a) Bylaws: The document outlining the overarching governance of your organization. Bylaws contain rules for operating the organization, voting rights and procedures, and how disputes are resolved.
b) Action by incorporator: The incorporator is responsible for taking the necessary steps to form a legal non-profit corporation in Colorado. This includes registering with Colorado and filing various forms with the state. Afterwards, the incorporator formally resigns from her/his role and appoints the board of directors.
c) Organization meeting minutes: Minutes are a detailed account of what happened during an organization’s first meeting. (see below)
d) Conflict of interest policy: Is sometimes overlooked, but it’s very important. A conflict of interest policy helps ensure that when conflicts of interest arise, the non-profit has a process in place under which advises the board of directors about all the relevant facts.
Have Your Initial Directors Meeting
Your initial board of directors meeting is very busy. Many important important agenda items need to be formalized, or approved. At the very least check off these items:
- Accept the Action of Incorporator
- Approve bylaws
- Elect or appoint officers
- Approve the conflict of interest policy
- Authorize Application for an EIN#
- Authorize a bank account.
- Authorize application for IRS tax exemption
Other matters which may be resolved at the first meeting:
- Appointment of legal council
- Creation of committees and appointment of committee chairs.
Obtain EIN# from IRS
After your initial meeting you’ll need to apply for an EIN# by visiting this website here:
Apply here for an EIN#
Open Bank Account
Following, once you have your EIN#, take it along with your articles of incorporation and bylaws to your bank and open an account in the name of the organization.
Obtain Business License (if you need to)
Depending on the activities your organization is conducting, as well as the location those activities are to take place, you may have to apply for a license or permit. For instance, if your selling merchandise or food you’ll need a sellers (vendors) permit. Remember, a non-profit is a form of legal entity. It doesn’t mean you can ignore health and safety regulations.
Apply for Federal Tax Exemption Status
Finally, you’ll need to apply to the IRS for federal tax exemption. Most non-profits fall under the 501(c)(3) category and file either a form 1023 or 1023 EZ. The link to the application is here:
IRS 1023 Application
Organizations applying under other 501(c) subsections or section 521 use Form 1024. If your non-profit falls under category 501(c)(4) file form 1024-A.
Once you have your federal tax exemption declaration from the IRS you can apply for a sales tax exemption. The application is here: https://tax.colorado.gov/tax-exemption-application
And just as important, if your organization raises more than $25,000 a year then you’ll have to register the organization with the state. The complete list of exemptions can be found at C.R.S. 6-16-104(6).
Of course once you’re up and running your non-profit will have to continually stay in compliance. But, that’s a topic for another day.