Starting a nonprofit in Rhode Island
Starting a nonprofit organization in Rhode Island is governed by Chapter 7-6 of Rhode Island statutes titled “Rhode Island Nonprofit corporation Act”
Scope of the Act
The provisions of this act apply to starting a nonprofit organization which propose to work in the areas of agricultural,animal husbandry, athletic, benevolent, charitable, civic, cultural, educational, elder care, eleemosynary, fraternal, fire engine companies, health services, horticultural, libraries, literary, patriotic, political, professional, commercial/industrial/trade association, recreational, religious, scientific, or similar other social causes.
Eligibility for starting a nonprofit organization in Rhode Island
1. The nonprofit organization must be represented by a ‘registered agent’ with a valid street address of RI. (P.O Box address not acceptable). This address would also be the ‘registered office address’ of the NPO and may or may not be the address of principal place of business for the organization. If a nonprofit organization does not have a RI address, it must then avail the service of a ‘commercial registered agent’ who provides his address in return for an annual fee.
2. The registered agent may be an individual (resident of state) or a domestic or a foreign corporation (‘for-profit’ or ‘not-for-profit’ corporation)’ authorized to transact business in RI.
3. The minimum number of directors for a RI nonprofit organization is three (3) .
Steps for starting a nonprofit organization in Rhode Island
Step1) Choosing a name
Rhode Island statutes prescribe two restrictions on naming of a nonprofit organization –
1)The name should not indicate a purpose different than the purposes for which the organization is being setup.
2) The name of the nonprofit organization must be distinguishable from the name of any other entity (business or nonprofit) in the records of the secretary of state, Rhode Island. A preliminary non binding name availability check of RI database can be conducted by calling the office at: (401) 222-3040
Further recommended read: Naming your nonprofit
Step2) Preparing the Article of Incorporation
Clauses for state law compliance
As per the nonprofit corporation Act of Rhode Island, the articles of incorporation of a nonprofit organization MUST include:
(1) A proposed name of the organization that meets the requirements specified above.
(2) The duration for which the organization is being setup (may also be mentioned as ‘perpetual’)
(3) The purposes for which the nonprofit organization is being formed.
(4) Any other provisions deemed expedient by the incorporators.
Clauses for IRS compliance
Organizations that plan to apply for obtaining federal tax exemption under section 501(c)(3) of IRS code are required to add clauses as prescribed by IRS to its article of Incorporation. These clauses must be added verbatim to avoid any deviations.
Download sample Article of Incorporation for RI nonprofit organization
Please note that this form is as per the state laws an needs to be suitably modified to include IRS compliance as per guidelines provided above.
Step3) Filing the Article of Incorporation with RI secretary of states
The Article of Incorporation must be signed by:
1) All the incorporators on each of the pages.
2) the registered agent accepting his appointment as the registered agent.
The Articles of Incorporation must be submitted along with a filing fee of $35.00. The fee is payable through check made payable in the name of ‘Rhode Island Secretary of State’.
Where to file
Duly filled in article of incorporation along with a check for requisite filing fee must be mailed across or delivered in person at –
Office of the Secretary of State Corporations Division 148 W. River Street Providence, Rhode Island 02904-2615 (401) 222-3040
Birth of nonprofit organization
A nonprofit organization comes into formal legal existence upon successful filing of the articles.
When the Articles are duly executed and submitted with the requisite filing fee to the corporation division, the office issues a ‘Certificate of Incorporation’ which is a formal legal evidence of the existence of the organization.
Time required – A successful filing for incorporating a nonprofit organization in Rhode Island takes around 3-7 days time from the date of submission of the documents with the division.
Conclusion- Forming a nonprofit corporation in Rhode Island by oneself can be a great learning experience because it introduces one to the legal processes and systems that would eventually govern the starting and operating of the nonprofit organization in Rhode Island.
The process of Incorporation can alternatively be outsourced to professional agents.
If however you decide to use the services of an agent, we recommend you not to let the agent prepare your article of incorporation or the bylaws of the organization, without you knowing their implications as these two documents will in turn decide how a nonprofit functions on a day to day basis.