Starting a Nonprofit in Indiana

Starting a nonprofit in Indiana is governed by the Indiana Nonprofit Corporation Act of 1991. The act is applicable to starting both domestic and foreign nonprofit organizations in Indiana.

Applicability – The provisions of this Act are applicable to setting up of public benefit organizations, mutual benefit (private foundations, member’s association etc) and religious corporations.

The Act is not applicable to starting Homeowners Association.

Eligibility to start a nonprofit organization under the Act

1) The application must be initiated by atleast 1 Incorporator. (No upper cap on the number of Incorporators).

Steps Involved in Starting a Nonprofit Corporation

Step 1) Choosing a Name – Section 23-17-5-1 of the Act places certain restrictions when choosing a name when forming a nonprofit organization.

They are –

(a) The proposed name must contain any one of the following corporate designators – ‘company’, ‘corporation’, ‘incorporated’, ‘limited’ or their  abbreviation viz – ‘co.’, ‘corp’,’inc.’, ‘ltd.’, or similar other words or abbreviations from any other language.

(b) The name should not be misleadng so as to indicative of some other activity other than the purposes of the organization as mentioned in the Articles of Incorporation.

(c) The name must not be similar to the name of a similar organization registered in the state of Indiana, to the extent of being a cause of confusion or misidentification.

(d) If an existing foreign corporation wishes to register in Indiana but cannot get the same name, it can incorporate and transact business in the state using a  fictitious name.

(e) The proposed name of the nonprofit need not be in English, but it must be reproduced using English letters or Arabic or Roman numerals for assessment purpose.

For more information on how to choose names – Read Naming a nonprofit organization.

Step 2) Drafting the Articles of Incorporation

Mandatory clauses to be included in the Articles of Incorporation

As per the Indiana Nonprofit Corporation Act of 1991, this document must contain the following provisions –

(a) The name of the proposed organization. (requirements of naming a nonprofit – described above)

(b) A statement clearly specifying whether the organization is a ‘public benefit corporation’, a ‘mutual benefit corporation’ or a ‘ religious corporation’

(c) A valid Indiana based street address of its initial registered office.

(d) Name of the initial registered agent who would be available at the registered address for receiving notices/demands etc on behalf of the organization.

(e) The name and street address of all the incorporators. (Address may or may not pertain to Indiana)

(f) A statement describing if the organization will or not allow one or more types of members to be admitted in its member’s roll.

(g) A Dissolution clause explaining rules to be followed for distribution of assets in case it is decided to dissolve the organization in future.

Optional clauses that can be included in the Articles of incorporation (Reccomended)

(a) The purpose(s) for which the organization is being set up. One of the  purposes can also be mentioned as “any lawful activity” to keep open the provisions for venturing into new areas as one starts developing a better perspective of the development sector.

(b) The names and addresses of the initial directors of the proposed organization. (Can be excluded if not yet finailized)

(c) Any other provision that would help in managing or regulating the affaird of the nonprofit corporation.(Including qualifications, powers, duties, processes related to board functioning or functioning of other classes of membership .

Clauses for IRS or State tax exemption recognition

As per IRS, a nonprofit organization claiming recognition of tax exempt status must include the following two clauses in its articles –

1) The purpose clause   2) The dissolution clause

Beasides this, the Article must ideally include a clause specifying the exact section of the IRS code (say Sec 501(c)(3) – for public charity organizations) under which tax exemption would be sought.

Its a good idea to include another clause that restricts conducting of any activities not permissible by the IRS code.

Similarily the terms for obtaining tax exempt status recognition with the Indiana Department of Revenue must also be included in the Articles of Incorporation.

To download a sample article of Incorporation for Indiana click here.

Click here to download the sample format of Articles of incorporation provided by the Indiana secretary of states.

Use this and other samples to draft your own Article of Incorporation.

Step 3 – Executing the Articles of Incorporation

The Article of Incorporation, (as drafted above) should then be type written on printed on white sheet of paper (on one side only).

If the organization plans to file these documents in person (not e-filing) the the orignal article of incorporation must be printed in 3 copies (1 original plus 2 conformed copies) plus 1 conformed copy of any other supporting document being filed with the articles.

Each of the copies should then be originally signed (copy of signatures not allowed on any of the copies) by all the initial directors of the proposed nonprofit organization. If the directors have not yet been finalized, this should be signed all all pages by the incorporator(s) of the proposed NPO.

Aditionally, the signer must also specify below each signature the capacity in which he is signing the Artilces (viz as a director/incorporator/attorney holder etc.)

Filing fee payable

Electronic Filing Fee      Manual Filing Fee

Articles of Incorporation               $20                                $30                (mandatory)
Application for reserved name    $10                                 $20               (optional)
Certificate of existence                    $15                                 $15                (optional)

Additionally the following fees are payable if one requires copying and certifying the copy of any filed document – $1 a page for copying and $15 for the putting in certification stamp.

The requisite filing fee may be paid by separate check (for each request), credit card, debit card, charge card, or any other method that the Secretary of state decides.

Step 4 – Filing for Incorporation with the Secretary of State,Indiana

The articles of incorporation (along with two conformed copies), along with two copies (1 original + 1 conformed copy) of any suporting document and separate checks for filing fee can be mailed (by regular or electronic methods) or delivered in person for filing with the office of Secetary of State, Indiana at the following address –

SECRETARY OF STATE
CORPORATIONS DIVISION
302 W. Washington St., Rm. E018
Indianapolis, IN 46204
Telephone: (317) 232-6576

Online Filing

Click here for online filing of nonprofit corporation in Indiana (a service of the office of Indiana Secretary of State).

Step 5 – Obtaining Certificate of Incorporation – Upon successful filing, the secrtary of state may either issue a certificate of incorporation (on payment of prescribed fee) or return a copy of the Articles stamping the word ‘filed’ on all its pages and signing on all pages (could be fascimile signature).

The nonprofit organization comes into a formal legal existence as a corporation on the date of successful filing.

Step 6) Post incorporation formality

After successful filing of the Articles of Incorporation with the Secretary of State, the first organizational meeting must be conducted. The notice of the meeting is to be given by the majority of Initial board of directors (or by the incorporators – if initial directors are not mentioned in the Articles).

The meeting must first start with electing of directors (if not already mentioned in the Articles)

Post this,  the meeting must take up the the follwoing issues-

a) The Appointment of Officers – like president,secretary, treasurer, Vice presidents, CEO etc of the NPO. (As per the state code, A nonprofit organization must mandatorily have three officers -a president, a secretary and a treasurer).

b) The adoption of the first bylaws of the newly formed nonprofit organization.

and any other activity that may be desired to be taken up.

Time required -The entire process can be completed in 3-5 days time ( within 8 hours in case you apply for expedited filing).

The time required for completing the incorporation primarily depends on your level of pre filing preparation.

Conclusion-

These days many individuals file for Incorporation on their own. If you wish to outsource the incorporation procedure, there are many incorporation service providers that will provide this service. (Fee varies widely). (You can search for them on the net).

Even if you decide to use the services of the professional ‘registered agents’, you should ideally draft your own articles and bylaws and have them ratified if needed by the service providers.

You should not let a third party draft them at the time of starting a nonprofit because this will eventually govern how your nonprofit functions on a day to day basis.