Starting a Nonprofit in Missouri
Starting a Non profit organization in Missouri is governed by Chapter 355 titled Non profit corporation Law of Missouri.
Eligibility for Starting a Nonprofit organization in Missouri
1) Minimum number of Incorporators required to start a NPO in Missouri is 1. The Incorporator must be a natural person (business entities not allowed to start a Nonprofit organization in Missouri) and must be 18 years or older.
2) Minimum number of Directors required is 3.
3) Must Appoint and maintain a registered agent and a registered office address in Missouri.The registered address must include a physical address such as a street, route or highway number (P.O Box no. is not acceptable).
4) The registered address may or may not be same as the address of principal place of business for the Non profit organization.
Steps Involved in Starting a Nonprofit organization in Missouri
Step 1) Choosing a Name for the Nonprofit organization –The Missouri code does not require use of corporate designators like ‘Co.’, ‘Corp.’ , ‘Ltd.’ or any other such terms when naming a Non profit organization.
The Only restriction states that, the name of the Nonprofit organization should not indicative of a misleading purpose and the name should be distinguishable from the name of any other entity operating out of Missouri.
Recommended read: Naming a Non profit organization
Step 2) Drafting the Articles of Incorporation – As per Missouri Laws, the Articles of Incorporation of a Non profit organization must include the following clauses –
(1) The proposed corporate name for the Non profit organization, as per requirements discussed elsewhere.
(2) A statement specifying whether the Non profit organization is a public benefit or a mutual benefit organization;
(3) The Valid street address of the initial registered office of the organization.
(4) The name of the initially appointed registered agent who would be available at the registered office of the organization to receive notices, demands and letters on behalf of the Nonprofit organization.
(5) The name and address of all the incorporators of the Nonprofit organization.
(6) A statement specifying Whether or not the proposed Non profit organization will have membership provision.
(7) The Dissolution clause – which specifies the process to be followed for the distribution of assets, if the organization is dissolved in the future.
Article Clauses that are Optional
The articles of incorporation may optionally include –
(1) The purpose clause – Specifying the purposes for which the proposed Non profit organization is being organized.The Act permits writing the purpose as ‘transaction of any lawful activity’ to cover for changes in purpose in future.
(2) The names and valid street addresses of the initial directors of the Nonprofit organization.
(3) Any other provision, that is desired to be included for managing & regulating the affairs, Defining & limiting the powers of members or just any other provision that would be considered necessary.
Clauses compulsory for Organizations seeking 501(c)(3) tax exemption
If an organization wishes to seek Tax exemption recognition under section 501(c)(3) of the IRS code, it must include the following clauses to its Articles of Incorporation –
1) Purpose Clause: The Purpose Clause needs to be suitably amended to include the following text –
” The corporation is organized exclusively for charitable, educational, religious, or
scientific purposes within the meaning of Section 501(c) (3) of the Internal Revenue Code.”
2) Inurement of Income: The Articles must include a statement that reads as follows –
” No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to, its members, directors, officers or other private persons except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered.”
3) Legislative or Political Activities: – The Articles of Incorporation must include a clause that reads –
“No substantial part of the activities of the corporation shall be the carrying on of propaganda or otherwise attempting to influence legislation and the incorporation shall not participate in or intervene (including the publishing or distribution of statements) in any political campaign on behalf of any candidate for public office.”
4) Operational Limitations :
“ Notwithstanding any other provisions of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from Federal Income Tax under Section 501(c) (3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law) or (b) by a corporation, contributions to which are deductible under Section 170(c) (2) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law).”
“ Upon the dissolution of the corporation, the Board of Directors shall,after paying or making provisions for the payment of all of the liabilities of the corporation,dispose of all the assets of the corporation exclusively for the purposes of the corporation in such manner, or the such organization or organizations organized and the time qualify as an exempt organization or organizations under Section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law), as the Board of Directors shall determine.
Any such assets not so disposed of shall be disposed of by the Circuit Court of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.”
Click here to download the Sample Article of Incorporation for a Non profit organization proposed to be incorporated in Missouri.
Step 3) Executing and Filing the Articles of Incorporation
The Articles of Incorporation should be printed on white sheet of paper and signed on all pages by any one of the Initital directors. If the Initial directors have not yet been identified, the Articles of Incorporation must then be signed by the Incorporators.
The filing fee for Non profit organizations in Missouri is $25.00. This amount is payable through check made favoring the “Director of Revenue.”
Duly signed Articles and the fee should be mailed to:
Secretary of State
PO Box 778
Jefferson City, MO 65102
Queries if any may be raised at toll-free number (866) 223-6535.
Time required – It takes around 1-5 days time to complete the incorporation formalities for starting a nonprofit organization in Missouri. Same day expedited filing can be completed upon payment of Expedited service fee.
Birth of the Nonprofit organization – The Nonprofit organization comes into formal legal existence in Missouri, as soon as the Articles of Incorporation are successfully filed .
Conclusion- The Incorporation process is a good learning experience for any one planning to start and run a Nonprofit organization in Missouri.
The Incorporation process can also be outsourced to professional commercial resident agents who can complete this exercise in return for a small fee.
However, it is advised not to let service providers draft the Articles and bylaws on your behalf as these two documents govern how a nonprofit functions on a day to day basis.