Starting a Nonprofit in Tennessee
Information on How to Start an Incorporated Nonprofit Organization in Tennessee. To start Unincorporated Nonprofit Organization, read: Start an Unincorporated Nonprofit Organization
Starting a nonprofit organization in Tennessee is governed by “Tennessee Nonprofit Corporation Act.” [Acts 1987, ch. 242, § 1.01.]
Scope of the Act The provisions of the Act are applicable to starting of ‘public benefit’, ‘mutual benefit’ (also called ‘private foundations’) or ‘religious’ organization within Tennessee.
Eligibility for staring a nonprofit organization in Tennessee
The nonprofit organization must have a registered office address of Tennessee (Valid street address, P.O box address is not accepted) and a person designated as registered agent who is generally available at the said address. If the organization does not have a street address of Tennessee, it should then avail the services of a ‘commercial registered agent’ who provides his address as the registered office address in return of an annual fee.
The registered office may (but need not) be address of ‘principal place of business’ of the organization. The principal place of business may be within or outside Tennessee.
The registered agent may be an individual who is a domicile of the state or a corporation.
Steps for starting a nonprofit organization in Tennessee
Step 1)Deciding a name for the organization
Tennessee Act prescribes 3 major directives on the subject of choosing a name for nonprofit organizations.
1) The name should be distinguishable from the name of any other entity on records of the office of secretary of state, Tennessee.
2) The name should not be indicative of a purpose different from the purpose for which the organization is being setup.
3) The name should not contain negative words like “bank,” “banks,”
“banking,” credit union,” “mortgage,”or “trust”.
The business services division of the state prescribes form #SS-4428 for an application for reservation of corporate names in the state. Reservation of names is optional and attracts a fee $20.00.
Recommended read: Naming a nonprofit.
Step 2) Preparing the Charter of Incorporation
The charter and all other documents submitted for filing must contain a statement that they are being filed pursuant to the Tennessee Nonprofit Corporation Act, (chapters 51-68).
As per the Act, the following clauses MUST be included in the charter
1) The name of the nonprofit organization. (as per requirements specified above).
2) A statement mentioning whether the organization is a ‘public benefit’, ‘mutual benefit’ or a ‘religious corporation’
3) Valid address(with zip code) of the organization’s initial registered office, the county where the office is located and the name of the registered agent, who would be available at the office for receiving notices and demands on behalf of the organization.
(5) Names and addresses (with zip code) of all the incorporators of the proposed nonprofit organization.
(6) Street address (with zip code) of the organization’s principal place of business.
(7) A statement that the corporation is a nonprofit organization.
(8) Whether or not the organization will have membership provision.
(9) Dissolution clause for distribution of assets in case the organization is to be liquidated in future.
Optional clauses in the Charter
Additionally the Charter of the nonprofit organization MAY include clauses specifying:
(1) The names and addresses of the initial directors of the organization.
(2) The purpose (s) for which the nonprofit organization is being setup.
(3) The powers, rights and duties of directors, officers and other members of the organization
(4) Provisions limiting the liability of directors, officers or other members of the organization.
(5) Any other provision,not inconsistent with provisions of the Act that the incorporators deem expedient to include for managing and regulating the affairs of the nonprofit organization.
Download sample Charter of Incorporation for Tennessee nonprofits
The Tennessee department department of state has prescribed format ss-4418 as sample charter of Incorporation for nonprofit organizations in the state.
IRS prescribed modifications to the Charter
This sample provided above meets the requirements of Tennessee nonprofit corporation Act. However it does not include clauses mandated by IRS for organizations seeking tax exemption under section 501(c)(3) of the IRS code.
Accordingly, organizations seeking to obtain the exempt status must download this attachment and add it to the charter.
Step 3) Filing the nonprofit charter with Tennessee secretary office
Executing the nonprofit charter
The article of Incorporation format provided above needs to by duly filled (preferably typewritten) and needs to be signed by the presiding officer of the board of directors of the organization. If the initial directors have not yet been decided, the article would have then to be signed by any one of the incorporators.
The person signing the article should mention his name, designation and date beneath his signature.
The fee payable for starting a nonprofit corporation in Tennessee is
This is payable through check, bank draft, money order or other such
instrument payable favoring “Tennessee Secretary of State”
Where to file
Duly completed charter along with a check for the filing fee must be mailed or delivered in person to:
Tennessee Department of State
312 Rosa L. Parks Avenue
6th Floor, William R. Snodgrass Tower
Nashville, TN 37243
In-person delivery for filing should be done between 8:00 a.m. to 4:30 p.m. (Monday – Friday).
Queries pertaining to filing can be mailed at:
Time required for Incorporation : Incorporating a nonprofit organization in Tennessee normally takes 2-6 working days from the date it is received for filing at the office.
Birth of the organization – A nonprofit organization comes into a formal legal existence in Tennessee on the date of filing of the charter with the business services division of the office of secretary of states.
The process of starting a nonprofit organization is a valuable learning experience that introduces the applicant to processes involved not only for incorporating but also for running the nonprofit organization in Tennessee.
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