Starting a Nonprofit in Nevada
Starting a nonprofit organization in Nevada is governed by Chapter 82 of the revised Nevada statutes.
Eligibility for Starting a Nonprofit organization in Nevada
1) The Application for starting the Nonprofit organization must be moved by one or more incorporators, who must be natural persons. (Unlike many other states Nevada does not allow a business entity to act as an Incorporator)
2) The Non profit organization must be represented by an Individual (Commercial or a Non commercial registered agent) who must have a valid street address of Nevada. (P.O Box address not allowed). This person is to undertake the responsibility to receive all notices and demands on behalf of the Non profit organization and his street address is to serve as the registered office address of the Non profit organization.
3) The registered office address of the Non profit organization may or may not be the place of business for the Nonprofit organization.
Steps involved in starting a Nonprofit organization in Nevada
Step 1) Choosing a Name for the Non profit organization As per Nevada statutes, a Nonprofit organization should have name that is distinguishable from the names of any other entity operating out of Nevada. If the Name of the organization appears to be similar to the name of a natural person, it must be accompanied by a corporate designator like “Incorporated,” “Inc.,” “Limited,” “Ltd.,” “Company,” “Co.,” “Corporation,” “Corp.,” or other such designators which identifies it as being a corporation and not a natural person.
The Name of the Nonprofit organization must not be indicative of a purpose other than the purpose for which the Nonprofit organization is being instituted.
Several other factors need to be kept in mind when choosing a Name of the Nonprofit organization. Recommended read: Naming a Nonprofit organization.
Step 2) Drafting the Articles of Incorporation
The Articles of Incorporation is the first and perhaps the most important document that governs the functioning of the Nonprofit organization. Nevada revised statutes prescribes certain guidelines for drafting the Articles of Incorporation of Nonprofit organizations.
Mandatory clauses in the Articles of Incorporation
As per Nevada revised statutes, the Article of Incorporation of a Nonprofit organization must include –
1. The name of the Nonprofit organization as per requirements specified above.
2. The name and address of the registered agent of the Non profit organization. If the registered agent is a non commercial registered agent, this clause must also include the title of the registered agent and the business office address of the registered agent.
3.A statement that specifies that the corporation is a nonprofit organization.
4. Statements that specify the purpose or purposes for which the organization is being instituted. The purpose can also include a general statement that reads as – “to engage in any lawful activity, subject to expressed limitations”. This general statement allows the Non profit organization to add and undertake any lawful activity in future.
5. A clause that mentions the names and mailing or street – residential or business addresses of the initial board of directors along with a provisions that allows for the scope of changing the number of directors in future, if desired.
6.A clause mentioning the names and street addresses of all the incorporators of the Non profit organization.
Optional provisions for the Article of Incorporation As per the revised Nevada statutes, the articles of incorporation of a Nonprofit organization may additionally include
1. A statement that subordinates the Nonprofit organization to a superior organization or any person (required if the Nonprofit organization is being set up as a local chapter or a sub unit of another Nonprofit organization).
2. Provisions pertaining to dissolution of the Non profit organization with regards to payment of its debts or provision pertaining to discarding of the assets of the nonprofit organization in the event of dissolution of the Nonprofit organization.
3. A statement that explains the voting powers of members or directors, or any class of members.
4. Any provision that allows or provides for delegates with partial power or authority as other class of members.
5. Any other clause that is not in contradiction with any laws of the state that may be desired for the regulation and management of the affairs of the Non profit organization by means of establishing, limiting or regulating the powers of the members of the Nonprofit organization.
Clauses required for IRS 501(c)(3) tax exempt recognition
Additionally, a nonprofit organization plans to seek tax exempt status recognition under section 501(c)(3) of the IRS code, it must include the following provisions to its Article of incorporation –
1) Purpose Clause: The Purpose Clause of the Articles must include a statement mentioning that the Non profit organization is being organized for charitable, educational, religious, or scientific purposes as defined under Section 501(c) (3) of the IRS Code.
2) Inurement of Income: The Articles of Incorporation should include a clause that restricts the inurements of the Income of the Non profit organization for the benefit of its officers, directors or any class of members.
3) Legislative or Political Activities: – The Articles of Incorporation must include a clause that restricts the NPO from undertaking any activity aimed at propaganda or at attempting to influence legislation through lobbying or political campaigning.
4) Operational Limitations : The Article must include a clause that prohibits the organization from undertaking any activity that is specifically not permitted to be carried on a tax exempt organization under Section 501(c) (3) of the IRS code or under Section 170(c) (2) of the IRS Code of 1954.
5) Dissolution Clause: The Articles must include a dissolution clause stating that if it is decided to dissolve the nonprofit organization in fututre, the Assets of the Nonprofit organization shall only be disposed off to another Non profit organization(s) which is a 501(c)(3) exempt organization at the time of such a dissolution.
Sample Nevada NPO Articles of Incorporation
Click here to download a sample Article of Incorporation as prescribed by the office of the Secretary of state of Nevada.
Please note that this sample includes only the bare minimum clauses as required by the Nevada revised statute. This article must be modified to include IRs clauses and any other clauses that have been discussed above or are otherwise desired to be included.
Step 3) Executing and Filing the Articles of Incorporation
The Article of Incorporation so prepared must be printed in duplicate copies and signed on all pages by all the incorporators of the organization. The registered agent must also sign at the appropriate place.
Filing fee-The fee for filing the Article of incorporation of a Nonprofit organization in Nevada is $50.00. The office also provides for an expedited filing for an additional $125.00 expedite fee.
If the organization wishes to obtain a certified copy of the Article of Incorporation for its own record, it has to pay an additional fee of USD 30.00 per certification.An additional copy fee of $2.00 per page is required for each additional copy generated when ordering 2 or more file stamped or certified copies.
Where to file
Duly completed Article of Incorporation along with a check of requisite fee must be hand delivered in person or mailed across to –
MAIN OFFICE: ( For Regular and Expedited Filings)
Secretary of State
New Filings Division
204 North Carson Street, Suite 4
Carson City NV 89701-4520
SATELLITE OFFICE: (Expedited Filings Only)
Secretary of State – Las Vegas
Commercial Recordings Division
555 East Washington Ave, Suite 5200
Las Vegas NV 89101
Time required – Filing and Incorporating a Non profit organization in Nevada takes around 2-7 days time to complete. Expedited filing can be completed on the same day upon payment of expedite fee.
Birth of the Nonprofit organization – A Nonprofit organization comes into formal legal existence in Nevada immediately after the Articles of Incorporation are successfully filed with the office of the Secretary of States Nevada.
Conclusion- The process of filing for Incorporation process is a valuable learning experience for any one planning to form and manage a Nonprofit organization in Nevada.
Alternatively , the process can be outsourced to professional Incorporation service providers.
It is however not advised to let the service provider draft the Articles of the Nonprofit organization as this governs how a nonprofit functions on a day to day basis.